The Australian dollar is pushing higher as stocks and commodities surge

• The Australian dollar pushed higher on Monday, aided by gains in stocks and commodity prices.

• Data from the US and China was largely above expectation, helping to offset further weakness in the Eurozone economy.

• Australia's Federal budget will be released on Tuesday, although it's unlikely to move markets. There's likely to be more interest on Australian building approvals data and the RBA's April interest rate decision that will be released earlier in the session.

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The Australian dollar is pushing higher, aided by gains in stocks and commodity prices as sentiment towards the outlook for the global economy improved from previously glum levels.

Here's the scoreboard at 8am in Sydney on Tuesday.

AUD/USD 0.7113 , 0.0018 , 0.25%
AUD/JPY 79.2 , 0.35 , 0.44%
AUD/CNH 4.7786 , -0.0046 , -0.10%
AUD/EUR 0.6344 , 0.0002 , 0.03%
AUD/GBP 0.5426 , -0.0037 , -0.68%
AUD/NZD 1.0451 , 0.002 , 0.19%
AUD/CAD 0.9465 , -0.0007 , -0.07%

After ending last week at .7095, the AUD/USD jumped higher upon the resumption of trade, helped by news over the weekend that activity levels across China's manufacturing sector improved for the first time in four months in March, according to data released by the Chinese government.

That result was confirmed by the separate Caixin-IHS Markit China manufacturing PMI for March that was released during Monday's trading session.

Along with firmer Chinese data, helping to alleviate concerns about the outlook for the world's second-largest economy, the Aussie was also supported by the release of the NAB's Australian Business Confidence Survey for March, revealing a solid improvement in operating conditions for most sectors from February.

The employment subindex in the survey also jumped, suggesting Australian employment growth is likely to remain firm in the months ahead, an outcome that will undoubtedly please policymakers at the RBA who are banking upon continued progress in lowering unemployment to help boost economic growth and inflationary pressures in the period ahead.

Concerns towards the outlook for US economy were also bolstered during Monday's session, helped by stronger-than-expected manufacturing activity levels in March and a further pickup in construction activity in February.

While US retail sales undershot market expectations, declining by 0.2% in February, large upward revisions to January's increase helped to offset the unexpected decline, further bolstering sentiment during the session.

With the outlook for the US and Chinese economies suddenly looking a whole lot brighter than just a few days ago, and despite the release of further dire economic data from the Euro-area, investors cheered the news, buying stocks aggressively around the world.

Large gains in crude oil futures and iron ore prices -- both important to Australia given the implications for export revenues -- also helped to underpin the Aussies's gains on Monday.

However, after hitting a session high of .7132, the AUD/USD gave back ground towards the close, as seen in the hourly chart below.

Image: Investing.com

While the Aussie dollar managed to gain ground against most major currencies, it fell back against the British pound that strengthened on the back of firmer UK manufacturing data along with speculation over a possible "soft" Brexit from the EU.

Turning to the day ahead, there's two main events in Australia that are likely to be of interest to traders.

Building approvals data for February will be released at 11.30am AEDT, with a decline of 1.8% expected.

That will be followed at 2.30pm AEDT by the Reserve Bank of Australia's April interest rate decision. No change in the cash rate is expected, although there is a small risk the RBA may follow the lead from the RBNZ in March by acknowledging that it may cut interest rates again.

This 10-second guide has more on what to look out for in the RBA statement.

At 7.30pm AEDT, Australia's Federal Budget will be handed down. Although it will attract plenty of headlines and attention, it's unlikely to be market moving based on prior evidence.

Outside of Australia, the main data events will be UK construction PMI, Eurozone PPI and durable goods orders and Empire State manufacturing index in the United States.