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Forex - AUD/USD regains ground, bounces off 5-month low

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Forexpros - The Australian dollar retreated from a five-month low against its U.S. counterpart on Tuesday, erasing sharp losses suffered after stronger-than-expected Chinese inflation data added to fears over the outlook for global economic growth.

AUD/USD clawed back from 0.9925, the pair's lowest since March 18, to hit 1.0228 during late Asian trade, gaining 0.39% on the day.

The pair was likely to find short-term support at 0.9925, the daily low and a five-month low and resistance at 1.0451, Monday's high.

Concerns over the global economic recovery were exacerbated after a report from China's National Bureau of Statistics published earlier showed that consumer price inflation rose by a seasonally adjusted 6.5% in July, the fastest since June 2008.

The report also showed that producer price inflation rose by a widely expected 7.5% in July, after climbing by 7.1% in the previous month.

The stronger-than-expected inflation data dampened hopes that the world's second largest economy would loosen monetary policy in the near-term.

China is Australia's largest trading partner.

Meanwhile, the Australian Bureau of Statistics said the number of home-loans granted in June unexpectedly stagnated, after rising by a downwardly revised 2.8% the previous month. Analysts had expected home-loan approvals to rise by 0.8% in June.

The Aussie was also higher against the yen, with AUD/JPY climbing 0.26% to hit 79.44.

Later in the day, the U.S. was to publish preliminary data on nonfarm productivity and labor costs.

In addition, the Federal Reserve was to announce the federal funds rate. The announcement will be followed by the bank's rate statement, which could provide hints regarding further monetary easing.

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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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