Home AUD/USD erases portion of recovery gains, trades around 0.7730 ahead of US data
FXStreet News

AUD/USD erases portion of recovery gains, trades around 0.7730 ahead of US data

  • AUD/USD is trading in the positive territory at the start of the week.
  • US Dollar Index holds above 91.00 after last week’s jump.
  • Eyes on Markit and ISM Manufacturing PMI data from US.

The AUD/USD pair lost more than 150 pips and snapped a three-week winning streak last week but opened on a firm footing on Monday. After rebounding to a daily high of 0.7774, however, the pair lost its bullish momentum and started to erase its gains. As of writing, AUD/USD was up 0.4% at 0.7735.

USD preserves its strength despite risk-positive environment

The sharp upsurge witnessed in US Treasury bond yields provided a strong boost to the greenback and the US Dollar Index (DXY) gained 0.6% on a weekly basis. Currently, the benchmark 10-year T-bond yield is up around 1% on the day and the DXY is posting small gains above 91.00 despite the upbeat market mood.

Earlier in the day, the data from Australia showed that the business activity in the manufacturing sector continued to expand at a robust pace in February with the Commonwealth Bank Manufacturing PMI arriving at 56.9.

Later in the session, the IHS Markit and the ISM will be releasing the February Manufacturing PMI reports for the US. More importantly, New York Federal Reserve President John Williams and Federal Reserve Governor Lael Brainard will be delivering speeches and investors will be paying close attention to comments regarding bond yields and inflation concerns.

Meanwhile, the S&P 500 Futures are up 1.2% on the day and a decisive recovery in Wall Street’s main indexes could make it difficult for the USD to continue to gather strength in the second half of the day.

Technical levels to watch for

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.