Forex News

07:44:20 02-08-2021

AUD/USD struggles below 0.7350 on softer China and Aussie data

  • AUD/USD remains subdued on the first trading day of the week.
  • The Australian dollar losses against the greenback on mixed economic data.
  • US Dollar rebounds from the lower levels amid risk-aversion.

AUD/USD treads water in the Asian session on Monday morning. The pair opened lower, however,  it recovered swiftly to touch the intraday high of 0.7350 but failed to preserve the momentum.

At the time of writing, AUD/USD is trading at 0.7344, down 0.01% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals recovers from its earlier lower levels to trade near the 92.00 mark.

The upbeat US economic data uplifts the demand for the greenback. Both Personal Income and Spending for June came higher in June and the Core Personal Consumption Expenditure (PCE) index came below the market consensus of 0.6% at 0.4%. 

The lower PCE reading suggested that it could be a sign transitory price pressure could be easing gradually.

The sentiments were also buoyed after the hope of a  more fiscal stimulus in the US ahead as senators were in the process to formalize, a sweeping $1 trillion infrastructure plan this week.

On the other hand, Aussie loses grounds as investors assessed the impact of New South Wales record levels of COVID-19 cases. The largest city of Australia, Sydney could reintroduce restrictions as well amid surging cases.

The IHS Markit Australia Manufacturing Purchase Managers Index ( PMI) came at 56.9 in July as compared to 58.6 in June. The reading indicated the slowest growth in factory activity in four months. The Ai Group Australian Performance of Manufacturing Index fell to 60.8 in July from 63.2 in the previous month.

The dismal Chinese Caixin Manufacturing PMI fell to 50.3 in July, below the market expectations of 51.0. The reading was the lowest since April 2020 due to the outbreak of the Delta variant in Nanjing, higher commodity prices, and rough weather conditions. The Aussie was negatively affected by the reading, benign the largest Chinese trade partner.

As for now, traders await the US ISM Manufacturing PMI to trade fresh trading impetus.

AUD/USD additional levels


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