AUD/USD gets no bullish impetus from above-forecast China Services PMI
- AUD/USD is struggling to recover ground despite an above-forecast China services PMI.
- Australia's growth rate slowed in the third quarter, reinforcing dovish RBA expectations.
- The escalating Sino-US political tensions could complicate matters on the trade front.
Aussie dollar is not impressed by an above-forecast China service sector data released soon at 01:45 GMT.
China Caixin Services PMI rose to 53.5 in November, beating the expected print of 52.7 by a big margin. The gauge stood at 51.1 in October. A reading above 50 indicates expansion.
Put simply, China's service sector expansion gathered pace in November. Even so, the Aussie dollar, a proxy for China, is struggling to find bids.
The AUD/USD pair has barely moved in the last 15 minutes and continues to trade in the red at 0.6836.
The lackluster response could be associated with the weaker-than-expected Aussie third-quarter gross domestic product (GDP) released at 00:30 GMT and the heightened odds of an RBA rate cut in February.
Further, renewed trade tensions could be forcing the AUD bulls to sit on the fence. US President Donald Trump said overnight that he may delay a trade deal with China till after the 2020 presidential election.
Meanwhile, the US House on Tuesday passed a bill demanding sanctions on senior Chinese officials over human rights violations in Uighur province. The move irked China, whose foreign ministry warned of retaliation.
The Sino-US political tensions could complicate matters on the trade front. All in all, the odds appear stacked in favor of the AUD bears.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
