AUD/USD stays in lower half of daily range near 0.6750
|- Risk-off atmosphere puts antipodeans under bearish pressure on Monday.
- US Dollar Index moves in a narrow range below 97.50 in NA session.
- Coming up: National Bank of Australia's Business Confidence Index.
After inching close to the 0.68 handle during the early trading hours of the Asian session, the AUD/USD pair lost its traction and slumped to a daily low of 0.6744 before going into a consolidation phase in the second half of the day. As of writing, the pair was down 0.47% on the day at 0.6755.
Dismal market mood hurts Aussie
The fact that the People's Bank of China (PBOC) decided to keep the USD/CNY rate above 7 for the third straight day revived concerns over the US, once again, accusing China of currency manipulation and further escalating the geopolitical tensions. Moreover, the lack of any positive developments regarding the US-China trade dispute and falling US Treasury bond yields kept investors away from risk-sensitive antipodeans.
In the Asian session on Tuesday, the National Australia Bank will release its Business Conditions and Business Confidence data for July. There won't be any other macroeconomic data releases from Australia and markets will keep a close eye on the USD/CNY rate.
Dollar stays calm ahead of inflation data
Meanwhile, the US Dollar Index (DXY) is moving in a relatively tight range on Monday after posting weekly losses for the first time in four weeks last Friday. The next significant catalyst for the DXY will be the inflation report that will be published by the US Bureau of Labor Statistics tomorrow.
Previewing the data, “The consensus expects a +0.2% mom reading for the core however our US economists expect a softer +0.13% mom reading mainly reflecting some unwind of the drivers that drove the strong reading in June," said Deutsche Bank analysts.
"It’s worth noting that markets are still pricing in 63bps of cuts by the Fed this year so it’ll be interesting to see if this data makes much of a dent in that.”
Technical levels to watch for
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