- AUD/USD struggles to break above 0.6800 despite early rebound.
- Investors wait for fresh developments surrounding US-China trade dispute.
- Coming up: RBA Governor Lowe will deliver a speech during Asian session on Tuesday.
The AUD/USD pair closed the previous week with small losses and staged an early rebound during the Asian trading hours on Monday on the back some positive headlines on the United States (US)-China trade conflict. However, the pair failed to preserve its momentum and erased its gains to turn flat near 0.6785 ahead of the American session.
China’s decision to raise penalties for theft of Intellectual Property (IP) over the weekend provided a boost to the market sentiment as this development was assessed as a factor that would make it easier for sides to come to terms to finalize the phase one of the trade deal. Although the trade-sensitive AUD capitalized on this news, the broad USD strength didn’t allow the pair to stretch higher.
The IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI) data on Friday, which showed that the business activity in the sector is forecasted to expand at a more robust pace in November than it did in October, provided a boost to the greenback. The US Dollar Index closed the week in the positive territory and inched higher on Monday to touch its best level in nine days at 98.33. As of writing, the index was up 0.05% on the day at 98.31.
Eyes on RBA’s Lowe
During the Asian session on Tuesday, Reserve Bank of Australia Governor Lowe will be delivering a speech titled “Some Lessons from Overseas.” Lowe is not expected to comment on the near-term policy outlook but any remarks on the state of the economy could cause the AUD to react sharply. In the minutes of its November 5th Board meeting, the RBA reiterated that they are willing to ease policy further if needed and revealed that the case for one more rate cut in November could be made to weigh on the AUD.
Technical levels to watch for
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