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AUD/USD consolidates below 0.68 in choppy day of trade

  • US President Trump says he is not ready to make a deal with China.
  • US Dollar Index moves sideways above 98 amid a lack of market drivers.
  • The RBA is scheduled to release the minutes of its August meeting on Tuesday.

The AUD/USD pair fluctuated between the 0.67 and 0.68 handles last week and continues to trade sideways on Monday as investors stay on the sidelines while waiting for the next significant market driver. As of writing, the pair was down 0.07% on the day at 0.6775.

Quiet start to the week

Over the weekend, US President Donald Trump said that he was not yet ready to make a trade deal with China and added that it would be harder to reach an agreement if the violence in Hong Kong continued. On the other hand, the People's Bank of China (PBOC) fixed the yuan stronger than last week this Monday and helped ease concerns over a currency war. Nevertheless, markets largely ignored these developments and antipodeans are staying stuck in their recent ranges against the US dollar.

On the other hand, after rising 1.2% on a weekly basis, the US Dollar Index is staying flat on the day near 98.20 to reflect the subdued market action. Meanwhile, the 10-year US Treasury bond yield is staging a decisive recovery adding 4.5% on the day and allowing the Greenback to stay resilient against its rivals.

There won't be any macroeconomic data releases from the US in the remainder of the day and markets will wait for the Reserve Bank of Australia (RBA) to release the minutes of its August meeting. Commenting on the bank's policy outlook, Nomura analysts said that they were expecting a 25 basis points rate cut in November 2019 and one more in February 2020.

Technical levels to watch for

 

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