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Forex - AUD/USD slips lower but China PMI supports

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Investing.com -

Investing.com - The Australian dollar slipped against its U.S. counterpart on Thursday, but remained within close distance of a three-week high as upbeat Chinese manufacturing data lent support to the export-related currency, while markets eyed upcoming U.S. economic reports.

AUD/USD hit 0.9470 during late Asian trade, the pair's highest since July 2; the pair subsequently consolidated at 0.9440, falling 0.20%.

The pair was likely to find support at 0.9381, Wednesday's low and resistance at 0.9495, the high of July 2.

The Aussie found support after data showed that China's HSBC Flash Manufacturing Purchasing Managers' Index rose to an 18-month high of 52.0 in June, from a reading of 50.7 the previous month, exceeding expectations for an increase to 51.0.

The upbeat data eased concerns over a slowdown in the world's second biggest economy. China is Australia's biggest export partner.

The Australian dollar rose sharply against its New Zealand counterpart, with AUD/NZD rallying 0.98% to 1.1002 after the Reserve Bank of New Zealand raised interest rates by a quarter percentage point but signaled that rates will not go any higher this year.

In a widely expected move, the RBNZ raised its benchmark interest rate to 3.50% from 3.25%.

Commenting on the decision, RBNZ Governor Graeme Wheeler announced a pause in the country's first round of interest-rate increases this year as the rising New Zealand dollar continues to curb inflation.

"It is prudent that there now be a period of assessment before interest ratesadjust further toward a more-neutral level," Mr. Wheeler said

"The level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall," he added.

Later in the day, the U.S. was to produce data on unemployment claims, manufacturing activity and new home sales.

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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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