AUD/USD falls to lowest since December amid strong USD, RBA decision

• The AUD/USD is trading just above A$0.7500, extending earlier falls, the lowest since December.
• The US Dollar is the primary driver as it rises across the board.

The AUD/USD is trading around 0.7510, down 0.20% on the day. At current levels, the pair is at the lowest levels since December 8th. The trough back then was 0.7502. A move below this level will send the AUD/USD to the lowest levels since June 2017. 

The primary driver is the US Dollar which continues gaining ground. US 10-year yields remain at elevated levels around 2.96%, supporting the greenback. The US currency is making gains against other currencies as well.

Earlier in the day, the Reserve Bank of Australia left the interest rate unchanged at 1.50% as widely expected. The central bank has not changed the interest rate since 2016 and has indicated that no changes are on the cards anytime soon. The institution led by Governor Phillip Lowe said that developments have been in line with the forecasts. They will release the quarterly Statement of Monetary Policy on Friday, May 4th, and this may shed more light on future monetary policy.

Trading conditions remain thin as most European markets are closed for the Labor Day holiday. Volume is expected to pick up in the American session.

AUD/USD levels to watch

The round level of 0.75 which coincides with the December low is the initial level to watch. Further below, the May 2017 high at 0.7475 is the next level to watch. Further down, the 0.7375 was a low point at that time.

On the topside, 0.7530 was the April 30 low. It is followed by the 0.7546 high seen earlier in the day and by 0.7585, a high point on April 29th.