- 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
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.