AUD/USD keeps running towards 0.7800 ahead of RBA
|- AUD/USD heads towards 0.7800 ahead of the RBA decision.
- The US dollar keeps falling amid dovish Fed expectations.
- China’s PMI beat expectations, iron-prices rally and PBOC raised FX ratio.
Having kicked off June on the right footing, AUD/USD is extending Monday’s recovery above 0.7750 amid favorable fundamental factors while all eyes remain on the RBA rate decision.
The aussie keeps pushing higher, mainly in response to the relentless selling pressure seen around the US dollar, as investors continue to price in dovish Fed expectations.
The US central banks’ policymakers continue to dismiss inflation concerns, suggesting that the Fed could maintain lower rates for longer. Further, month-end fx repositioning also hit the dollar’s demand, despite the rise in the US Treasury yields.
Additionally, the aussie bulls cheer upbeat Australian Current Account and Chinese Caixin Manufacturing PMI while shrugging off a big miss on Aussie’s Company Gross Operating Profits data. China’s Caixin Manufacturing PMI rose to 52.0 in May vs. 51.9 previous and 51.9 expectations.
The rally in iron-ore prices, amid China’s easing of the emissions control on steel plants, also adds to buoyant tone around the resource-linked aussie. Traders weigh in the news that the People’s Bank of China (PBOC) has raised the FX Reserve Requirement Ratio, in another effort to curb the yuan appreciation.
Attention now turns towards the Reserve Bank of Australia’s (RBA) monetary policy decision for a fresh trading impetus. The RBA Is likely to hold fire but may turn out to be hawkish, following the Bank of Canada’s (BOC) and RBNZ’s footsteps.
AUD/USD technical levels
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