AUD/USD Perky Ahead of RBA

The Australian dollar broke out to a five-week high and was the was the top performer Monday. The yen lagged as risk appetite generally improved. The RBA decision is up next. The Premium long in AUDUSD issued 2 weeks ago is currently 130 pips in the green so clients are cautioned to realise some gains ahead of the RBA announcement. On Monday, 2 new trades were issued.

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AUD/USD climbed higher after rising above the May high of 0.7605 as the US dollar lost ground. An upbeat tone in equity markets helped AUD and other commodity currencies as the NASDAQ closed at a record high.

USD was slumping early Monday but a small bid appeared in early New York trade. The lone US data point was a 0.8% dip in April factory orders compared to -0.5% expected, led by a dip in transportation orders. It follows a 1.6% rise in March. Core capital goods orders weren't revised from the preliminary +0.9% reading.

Cable reversed early gains to finish lower at 1.3315. Theresa May relayed the details of a phone call with Trump where she expressed frustration with tariffs. Previously, she had positioned herself as more of a Trump ally but it's clear that the UK will side with other countries at this week's G7.

Up next is the RBA decision at 0430 GMT. The market isn't pricing in any chance of a hike or a cut and looking ahead, a long period of rates flat at 1.50% is forecast, with a 50% chance of a single rate rise by this time next year. The Aussie suddenly has a hint of wind at its back. If Lowe can stoke some optimism about growth, then it's blue skies above for AUD/USD.