AUD/USD Daily Fundamental Analysis for May 3, 2011

The Australian dollar dropped against greenback during the first day trading of the week after president Obama said al-Qaeda leader Osama bin Laden has been killed.

Moreover, Aussie retreated from areas around 1.10 against the US dollar, as expectations for the Reserve Bank of Australia yo keep interest rates unchanged at their level pressured the pair and triggered profit taking.

House price index (QoQ) in Australia dropped by 1.7% during the first quarter of the year, compared with the previous 0.7% in the fourth quarter, supporting the Australian dollar to decline versus its all majors.

On the other hand, the US dollar the dollar has strengthened after President Barack Obama said al-Qaeda leader Osama bin Laden had been killed by the U.S. military in Pakistan, easing fears over further political pressure on the US and possibility for the end of war.

Furthermore, gold slid from its multi decades high of $1576.52 as the greenback rebounded after the news.

On Tuesday, the attention will be on Australia and the Reserve Bank of Australia’s rate decision at 04:30 GMT. The RBA is expected to keep the rates steady at 4.75% where the market awaits any hawkish comments from the bank.

Furthermore, the US economy is to release the factory orders for March at 14:00 GMT, where expectations are for a rise by 1.5% from the previous drop by 0.1% in February.

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