AUD/USD retreats from highs to 0.6770 after China comments on US tariffs
- China says US decision to impose 10% tariffs violates Osaka meeting consensus.
- Employment in Australia rises more than expected in July.
- US Dollar Index pulls away from 98 handle as US T-bond yields turn south.
The AUD/USD pair gained traction on the back of upbeat labour market data from Australia during the Asian trading hours and rose to a daily high of 0.6790. However, with the latest comments from China on the trade dispute with the US, the AUD came under modest selling pressure and the pair was last seen trading at 0.6770, still adding 0.33% on a daily basis.
Strong jobs data boost AUD
The data published by the Australian Bureau of Statistics on Thursday revealed that employment increased by 41,100 in July following June's 2,400 decline and beat analysts estimate of 14,000 by a wide margin. Further details of the report showed that the unemployment rate remained unchanged 5.2% and the labour force participation rate ticked up to 66.1%.
Commenting on the Trump administration's decision to start imposing an additional 10% tariff on some Chinese imports starting September, China said that the US action was violating the consensus reached at the G20 meeting in Osaka and reiterated that they will have to take countermeasures against the US tariffs.
With these comments triggering a fresh flight-to-safety, the 10-year US Treasury bond yield extended its decline and was last down 2.7% on the day, allowing the pair to cling to its daily gains by weighing on the Greenback. At the moment, the US Dollar Index, which tested the 98 handle earlier in the day, is down 0.1% on the day at 97.86.
Later in the day, retail sales, industrial production, and weekly jobless claims data from the US will be looked upon for fresh impetus.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
