AUD/USD pares early gains, trades flat around 0.7730 ahead of US data
- AUD/USD lost its traction after rising to 0.7700 area.
- US Dollar Index stays below 90.00 following Monday’s decline.
- Focus shifts to ISM Manufacturing PMI data from US.
The AUD/USD pair closed the first day of the week modestly higher and advanced to a daily high of 0.7768 during the Asian trading hours. However, the pair struggled to preserve its bullish momentum ahead of the high-tier macroeconomic data releases from the US and was last seen trading flat on the day at 0.7733.
RBA left policy settings unchanged in June
Earlier in the day, the Reserve Bank of Australia (RBA) announced that it left the official cash rate (OCR) unchanged at a record low of 0.10% at their June monetary policy meeting as expected. In its policy statement, the RBA noted that the board will consider future bond purchases at the next policy meeting in July. On a positive note, “the progress in reducing the unemployment has been faster than expected,” the statement read.
Although AUD/USD pushed higher with the initial reaction, the USD’s resilience didn’t allow the pair to stay in the positive territory. The US Dollar Index, which lost 0.25% on Monday, is currently posting small daily gains at 89.86.
Later in the day, the ISM Manufacturing PMI report from the US will be looked upon for fresh impetus. Investors expect the business activity to continue to expand at a robust pace in May. The Prices Paid Index component of the publication, which rose to its highest level since 2008 at 86.8 in April, will be the key figure to watch. A stronger-than-expected print could provide a boost to US Treasury bond yields and help the greenback gather strength in the second half of the day.