- AUD struggles to find demand in risk-off market environment.
- US Dollar Index starts week on strong footing.
- NAB’s Business Confidence Index for Australia will be published on Tuesday.
The AUD/USD pair gained more than 100 pips last week and continued to push higher during the Asian session as the upbeat market mood helped the risk-sensitive AUD find demand. However, with the greenback starting to gather strength during the European trading hours, the pair stage a sharp U-turn. As of writing, AUD/USD was down 0.6% on the day at 0.6490.
USD capitalizes on risk-off flows
Easing tensions between the US and China and heightened optimism around re-opening of economies boosted the sentiment at the start of the week. However, the poor performance of major European equity indexes reflected a negative shift in the market mood and allowed the US Dollar Index to gain traction.
At the moment, the index is rising nearly 1% on a daily basis at 100.05 while the Euro Stoxx 50 and Germany’s DAX 30 indexes are both losing around 0.9%.
There won’t be any significant macroeconomic data releases from the US on Monday and the risk perception is likely to continue to drive the pair’s action.
On Tuesday, the National Bank of Australia (NAB) will release the Business Confidence and Business Conditions indexes, which slumped to all-time lows of -66 and -21, respectively, in March, for April. The Consumer Price Index (CPI) and the Producer Price Index (PPI) from China will be looked upon for fresh impetus as well.
Technical levels to watch for
Share
