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Forex - AUD/USD down ahead of China data

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Investing.com - The Australian dollar traded lower against its U.S. rival during Wednesday's Asian session as traders await June trade data out of China.

In Asian trading Wednesday, AUD/USD dropped 0.13% to 0.9167. The pair was likely to find support at 0.9145, Monday's low and resistance at 0.9250, the high of July 2.

The Aussie caught a small bid Tuesday after data showed that Australia's NAB business confidence index rose to zero in June, from a reading of minus 1 the previous month.

Still, the embattled currency was pressured during Tuesday's Asian session after the release of Chinese inflation data, which showed that consumer prices rose 2.7% in June from a year earlier, above expectations for a 2.5% increase and accelerating from a 2.1% rate of increase in May.

China is Australia's largest trading partner and a slowing economy there has hampered Australia's ability to bolster its own economy as its mining boom careens to an end.

Traders view this week as pivotal to the Aussie's near-term fortunes. A spate of central bank meetings and data points could help lift the Aussie to 92 to 93 cents against the greenback if shorts are forced to cover.

Conversely, the Aussie could be vulnerable to intense selling pressure if psychological support at 90 cents is violated.

Later Wednesday, the Federal Reserve will release the minutes of its June monetary policy meeting, which investors hope will provide more insight into the fate of stimulus measures that many traders expect will be wound down starting in September.

The Aussie has recent proven vulnerable to tapering talk and confirmation to that effect could further weaken the currency.

Elsewhere, AUD/JPY fell 0.44% to 92.44 while AUD/NZD dropped 0.20% to 1.669.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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