The AUD/USD closed higher on Monday after posting a two-sided trade throughout the session. The Aussie recovered on Monday in a rally fueled by an improvement in investor risk appetite.

U.S. equity indexes posted solid gains with Treasury yields modestly higher amid further focus on Trump tariffs, with an attempted push back from ranking GOP members. Some traders thought that Trump could soften his stance toward the tariffs and use them as a negotiation tool.

Early Monday, Trump may have opened the door for negotiations on tariffs when he sent out a series of tweets suggesting he remains flexible on the idea.

Trump’s tweets stated, “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.” Adding that “Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done.”

In other news, House Speaker Paul Ryan said he was “extremely worried” about Trump’s trade plan. Congressional leaders, meanwhile, will not rule out potential action if Trump decides to move forward with his tariff plan.

In the U.S., Final Services PMI came in at 55.9, matching expectations. ISM Non-Manufacturing PMI was 59.5, better than the 58.9 estimate, but below last month’s 59.9 read.

Additionally, Federal Reserve Vice Chairman Randal Quarles said U.S. financial regulators are working quickly to make “material changes” to the Volcker Rule, one of Wall Street’s most hated post-crisis restrictions.

The measure named for former Fed Chairman Paul Volcker was included in the 2010 Dodd-Frank Act as a way to reduce risk-taking by banning banks from trading with their own money. It has been a top target of Trump administration plans to dial back financial regulations as a way to spur economic growth.

Forecast

Shortly before the Reserve Bank of Australia’s interest rate and monetary policy decisions at 0330 GMT, the AUD/USD is trading higher on a slight overnight increase in demand for higher risk assets.

Capping gains are weak economic reports which showed a drop in the Current Account and lower than expected Retail Sales.

The Current Account came in at -14.08 Billion. Traders were looking for -12.3 Billion. The previous report was revised lower to -11.08 Billion.

Retail Sales were 0.1%, below the 0.4% estimate, but better than the previously reported -0.5%.

Later today, the RBA is expected to leave its benchmark cash rate at 1.50% as the country’s growth outlook hasn’t changed very much since the last meeting in February. Expect the RBA to say that the jobs market continues to improve, but real wage growth is still struggling.