AUD/USD slumps to 0.6970 area, looks to close fourth straight day in red
- Disappointing PMI data from Australia weighs on the currency.
- US Dollar Index turns flat on the day near 97.70 in the NA session.
- RBA's Assistant Governor Kent is scheduled to speak in the Asian session.
The AUD/USD pair came under bearish pressure during the Asian trading hours following uninspiring PMI data from Australia before making a modest recovery in the second half of the day. However, with the USD gathering strength in the last couple of hours, the pair struggled to move back into the positive territory and was last seen trading at 0.6975, erasing 0.42% on a daily basis.
The data published jointly by the Commonwealth Bank of Australia and the Markit Economics earlier today revealed that the business activity in Australia's both the manufacturing and the service sector expanded at a slower pace in July than they did in June to weigh on the AUD.
USD valuation dominates pair's action
Although the pair was able to erase a portion of its daily losses with the US Dollar Index starting to retrace this week's rally following a batch of mixed macroeconomic data releases from the United States, the DXY didn't have a difficult time reversing its direction with the USD capitalizing on the risk-off mood and outperforming risk-sensitive currencies such as the AUD. The DXY was last seen flat on the day at 97.72.
The Markit Manufacturing PMI in the US dropped to 50 in July but the Services PMI improved to 52.2 and beat the market expectation of 51.7 to offset any negative impact on the USD. Other data from the US revealed that New Home Sales rebounded in June by rising 7%.
There won't be any macroeconomic data releases from Australia but the Reserve Bank of Australia's (RBA) Assistant Governor Kent will be delivering a speech during the Asian trading hours.
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.
