The Australian dollar has started the week on a high note, as the US dollar is broadly lower on Monday. AUD/USD is currently trading at 0.7778, up 0.56% on the day. Today’s high of 0.7784 is the highest level since March 18th.
The Aussie has been red-hot of late, gaining 2.3% in the month of April. The US dollar has fallen flat as US Treasury yields have retreated. The greenback had enjoyed sharp gains in March, piggybacking on rising US yields.
RBA minutes next
The RBA releases the minutes of its policy meeting from earlier this month (1:30 GMT). There were no surprises from policymakers, as the bank held the cash rate and the 3-year yield target at 0.10%. The RBA statement made specific reference to housing lending costs, noting concern over the rise in housing prices and low interest rates.
The impressive economic recovery in an ultra-low rate environment has fueled a red-hot housing market, prompting fears of a housing market crash. Aside from concerns over a housing bubble, the jump in housing prices threatens to add to already high levels of household debt. It will be interesting to see if the minutes also refer to concerns over house prices.
Last week’s stellar employment numbers were further proof in the pudding that the economic recovery is in full swing. The economy added 70.7 thousand jobs, easily outperforming the consensus of 35.2 thousand. As well, the unemployment rate fell to 5.6%, down from 5.8% and below the estimate of 5.7%.
Chart created with TradingView
- AUD/USD is putting strong pressure on resistance at 0.7801. This line has held since mid-March, so a break above it would be significant. This is followed by resistance at 0.7869.
- On the downside, there is support at 0.7626. Below, we find support at 0.7519
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event
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