AUD/USD steadies above 0.70, focus shifts to RBA minutes
|- Upbeat data from China help antipodeans gather strength.
- US Dollar Index inches higher toward 97 handle on Monday.
- RBA is scheduled to publish the minutes of its July meeting on Tuesday.
The AUD/USD pair started the week on a positive note as the upbeat macroeconomic data releases from China allowed the AUD to gather strength. After advancing to an 11-day high of 0.7038, the pair has gone into a consolidation phased and was last seen trading at 0.7036, adding 0.38% on a daily basis.
The data from China revealed that the real GDP in the second quarter expanded by 1.6% on a quarterly basis to surpass the market expectation of 1.5%. Moreover, retail sales in China increased by 9.8% and industrial production grew by 6.3% on a yearly basis in June with both readings coming in above analysts' estimates.
In the second half of the day, the greenback staged a technical recovery to limit the pair's upside. Nevertheless, with investors waiting for the RBA to publish the minutes of its July meeting, at which the bank decided to cut its policy rate by 25 basis points, the pair stayed in its daily range.
Commenting on the fact that AUD net shorts dropped for the second straight week last according to the CFTC Commitment of Traders Report, "Hopes are building that the RBA’s pre-emptive rate cuts and looser fiscal policy outlook may be sufficient stimulus for now," Rabobank analysts said.
The NY Fed today reported that the Empire State Manufacturing Survey's General Business Conditions Index improved to 4.3 in July from -8.6 in June and came in better than the market expectation of 2. The US Dollar Index pulled away from the weekly low that it set at 96.72 on Friday but seems to be having a difficult time gathering enough momentum to break above the 97 mark. At the moment, the index is up 0.23% on the day at 96.95.
Technical levels to watch for
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