AUD/USD spent most of the session consolidating between 1.0655 and 1.0735. At the end of trade, the pair was up 0.3% at 1.0702.
Risk remained fairly resilient, despite subdued trading in equity markets. After having posted good gains for the week, it seems the pair is in consolidation mode as investors await a key interest rate announcement in Australia on Tuesday. The RBA is widely expected to cut rates, but a staggering number of economists still feel the RBA may hold off. A decision to keep rates on hold would be bullish for AUD/USD, while a decision to cut rates (which is widely expected) is probably already priced in, and would see the pair continue to move sideways.
It is going to be a huge week in the US on the economic front. Key announcements out of the US, with the FOMC in focus and the possibility that the Fed will signal QE3 are on the way. Some traders will be looking to go long on the premise that the RBA may not move to cut rates and on potential QE3 news.