AUD/USD trades with modest losses below 0.7630 as focus shifts to US PMI data
- AUD/USD failed to stay in the positive territory above 0.7650.
- US Dollar Index is pushing higher toward 91.00 on Monday.
- PMI reports expected to show ongoing expansion in US' manufacturing activity in January.
The AUD/USD pair edged higher in the early trading hours of the European session and touched a daily top of 0.7663 before losing its bullish momentum. As of writing, the pair was down 0.25% on a daily basis at 0.7625.
Earlier in the day, the data from China showed that the Non-Manufacturing PMI and the Manufacturing PMI in January fell to 52.4 and 51.3 respectively. With these readings falling short of market expectations, the AUD struggled to find demand during the Asian session.
USD stays bullish at the start of the week
Although the sharp upsurge witnessed in major European equity indexes helped the risk-sensitive AUD outperform its rivals, the broad-based greenback strength forced AUD/USD to reverse its direction.
The US Dollar Index (DXY), which tracks the USD's performance against a basket of six major currencies, is currently up 0.35% on the day at 90.89. Meanwhile, S&P 500 Futures are gaining nearly 1%, suggesting that the DXY could have a tough time pushing higher if Wall Street's main indexes start the new week on a strong footing.
Later in the day, the ISM and the IHS Markit will be publishing the Manufacturing PMI reports for January. Both of these data are expected to show that business activity in the manufacturing sector continued to expand at a robust pace.
On Tuesday, the Reserve Bank of Australia will announce its Interest Rate Decision. According to a recently conducted Reuters survey, 21 of 22 economists polled think that the RBA will extend its quantitative easing programme beyond April. If the RBA adopts a dovish outlook, AUD/USD could extend its slide in the first half of the week.
Technical levels to watch for