AUD/USD REMAINS SIDEWAYS AROUND 0.6700 AHEAD OF RBA MINUTES AND CHINA’S GDP

The AUD/USD pair has continued its sideways auction in the early Asian session around 0.6700. The Aussie asset remained lackluster on Monday despite a decent upside in the US Dollar Index (DXY). A back-and-forth action might continue in the Aussie asset ahead of the release of the Reserve Bank of Australia (RBA) minutes and Chinese Gross Domestic Product (GDP) data.

S&P500 ended Monday’s session on a positive note led by a recovery in banking stocks. A stock-specific action has been witnessed in US equities amid the quarterly result season. The US Dollar Index (DXY) extended its upside journey to near 102.20 in hopes of more rate hikes from the Federal Reserve (Fed) despite the sheer softening of United States inflation.

The demand for US government bonds dented significantly as chances of one more rate hike are above 86%, according to the CME Fedwatch tool. Therefore, the yields offered on 10-year US Treasury bonds rose firmly above 3.60%.

A power-pack action is expected from the Australian Dollar amid the release of the RBA minutes, which will provide a detailed explanation behind keeping interest rates unchanged.

RBA Governor Philip Lowe could sound hawkish in coming sessions as Australian Employment (March) data showed higher than anticipated additions of fresh talent last week. Also, the Unemployment Rate dropped to 3.5%. This could force the RBA to reconsider its unchanged policy stance.

On Tuesday, investors will also focus on China’s Gross Domestic Product (GDP) (Q1) data. According to the estimates, the Chinese economy has expanded by 2.2% vs. a stagnant performance shown in the last quarter of CY2022. On an annual basis, the economy is expanded by 4.0% against a 2.9% growth rate recorded earlier. It is worth noting that Australia is the leading trading partner of China and higher Chinese GDP data would support the Australian Dollar.