AUD/USD – Firm Ahead of US Housing Sales

AUD/USD has posted slight gains in Tuesday trading. The pair continues to trade at high levels, as the pair remains in the mid-0.93 range early in the North American session. On the release front, Tuesday's key event is US Existing Home Sales. The indicator has been softening, and the markets expect the downward trend to continue. Australian CB Leading Index showed little change in March. The markets are waiting for CPI, this week's major event, which will be published early on Wednesday.

US releases ended last week on a high note, as employment and manufacturing numbers were strong. The all-important Unemployment Claims was up slightly to 304 thousand, but had no trouble beating the estimate of 316 thousand. With the Federal Reserve planning another trim to its QE program at the end of the month and speculation rising about a possible interest rate increase next year, every employment release is under the market microscope. Meanwhile, the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

The ongoing crisis in Ukraine hasn't had much of an effect on the markets until now, but that could quickly change if the charged situation spirals out of control. Russian President Putin has threatened to act on his "right" to invade Ukraine, and has steeply raised the price that Ukraine must pay for its gas supplies. Ukrainian Prime Minister Arseniy Yatsenyuk blasted the move as "economic aggression" and said his country must prepare for a complete cutoff of Russian gas. Meanwhile, US Vice-President Joe Biden is in Kiev in a show of support for Ukraine, and the US has said it will increase sanctions if no progress is made in resolving the crisis.

AUD/USD 0.9365 H: 0.9370 L: 0.9332