AUD/USD erases daily gains, settles below 0.71

• Modest USD recovery weighs on the pair.
• Commodities' performance helped AUD earlier in the day.
• Coming up: RBA meeting minutes.

The AUD/USD pair started the week on a firm footing boosted by the risk-on mood and rising commodity, namely iron ore, prices in the first half of the day. After touching its highest level of March at 0.7120, however, the pair failed to preserve its bullish momentum and erased its gains in the NA trading hours. As of writing, the pair was virtually unchanged on the day at 0.7090.

In the early trading hours of the Asian session on Tuesday, the RBA is scheduled to release the minutes of its March meeting, at which the bank decided to keep the policy rate unchanged as expected and said that trade tensions remained as a source of uncertainty. Last week, Annette Beacher, chief Asia-Pacific macro strategist at TD Securities, argued that the RBA was pointing out to a balanced outlook for the economy regardless of the pessimistic market pricing.

Ahead of the RBA's minutes, the house price index from Australia will be looked upon for fresh impetus. Analysts expect house price to decline by 2% on a quarterly basis in the fourth quarter following the third quarter's 1.5% fall.

On the other hand, the US Dollar Index pushed lower earlier in the day but didn't have a tough time recovering its losses ahead of Wednesday's FOMC meeting. A modest rebound witnessed in the 10-year T-bond yield following last Friday's sharp fall seems to be supporting the greenback. At the moment, the DXY is up 0.1% on the day at 96.60.

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