- AUD / USD is trading in positive territory on Monday.
- The US dollar index fluctuates in a very tight range at the beginning of the week.
- The focus shifts to the Reserve Bank of Australia (RBA) policy announcements.
The pair AUD/USD it posted small losses last week, but managed to rebound on Monday. At time of writing, the pair was up 0.32% on the day at 0.7738.
However, with trading conditions still poor due to the Memorial Day holiday in the US, the AUD / USD is likely to spend the remainder of the day in a tight range. Reflecting the choppy market action, the US Dollar Index is moving sideways around 90.00.
Focus shifts to RBA meeting
Hours earlier, data from Australia showed that credit to the private sector grew 1.3% annually in April. This reading was slightly higher than the previous month’s impression of 1%, but failed to trigger a notable market reaction. Meanwhile, the China Federation of Logistics and Purchasing (CFLP) reported that the non-manufacturing PMI improved to 55.2 in May from 54.9 in April.
On Tuesday, the Reserve Bank of Australia (RBA) will announce its Interest Rate Decision and publish the Rate Statement. In a preview of this event, “We continue to expect the cash rate to remain unchanged until 2024 and we expect a full AUD100bn extension of quantitative easing (QE) beyond the second round,” said Lee Sue Ann, economist of UOB Group.
On a similar note, Bloomberg reported that the RBA is expected to keep its policy settings unchanged.