AUD / USD rises above 0.7350 ahead of US PMI data.

• AUD / USD is rising at the beginning of the week.
• The US dollar index remains below 92.00 after Friday’s rebound.
• Focus shifts to US ISM and Markit manufacturing PMI data.

The pair AUD/USD lost traction on Friday and ended up closing the week lateralized. After remaining relatively quiet during Asian trading hours on Monday, the pair began to rise supported by market optimism. At time of writing, AUD / USD was up 0.2% on the day at 0.7358.

Earlier in the day, data from Australia showed that the AiG Manufacturing Performance Index declined to 60.8 in July from 63.2 in June, while the Commonwealth Bank Manufacturing PMI fell to 56.9 from 58.6. Additionally, ANZ job postings contracted 0.5% after increasing 1.5% in June.

USD weakens modestly ahead of PMI data

The release of mixed macro data failed to trigger a notable market reaction, but the observed positive shift in market sentiment helped the AUD find demand during the European session. Currently, S&P futures and Nasdaq futures are gaining more than 0.3% and the US Dollar Index is posting small daily losses at 91.96.

Later in the session, the ISM will release the US Manufacturing PMI for July. The overall PMI is expected to reach 60.9. However, investors will be paying close attention to the Prices Paid component of the survey and a stronger than expected reading could provide a boost to the USD in the second half of the day and vice versa.

On Tuesday, the Reserve Bank of Australia will announce its monetary policy decisions.

With a preview of this event, “after the RBA meeting in July, we have affirmed our view that the conditions for rate hikes are unlikely to be met until at least the end of 2023,” said the Group’s economist. UOB Lee Sure Ann. “In the meantime, we expect their QE program to be extended again in November, with a possible further reduction in the pace of purchases.”

Technical levels