AUD/USD extends gains, hits fresh daily highs above 0.6500

• US Dollar weakens at the beginning of a busy week.
• AUD/USD rises above 0.6500, next resistance at 0.6530.
• RBA to announce monetary policy decision on Tuesday.

The AUD/USD opened the week under 0.6400 and recently printed fresh daily highs above 0.6500. The pair has been rising constantly since the Asian session and gained momentum on American hours amid a weaker dollar and risk appetite. It peaked at 0.6509 and is still moving with a bullish tone.

Dollar under pressure

The greenback weakened further across the board following the release of US data. The ISM Manufacturing Index dropped more than expected to 50.9 from 52.8. All details of the report showed numbers below market consensus.

US yields hit fresh lows after the ISM. The US 10-year yield that just a week ago was above 4%, is at 3.60%. In Wall Street, stocks are up significantly with the Dow Jones gaining more than 2%. Gold and silver are up sharply at weekly highs.

The combinations of risk appetite and lower yields are helping the AUD/USD but not the AUD/NZD that is falling, currently below 1.1380.

The next critical even for the aussie is the Reserve Bank of Australia (RBA) meeting on Tuesday. Market consensus expects a 50 basis points rate hike. The announcement and the tone of the statement will likely have a significant impact on AUD/USD.