“¢ Escalating US-China trade tensions continue to dent demand for the Aussie.
“¢ Bulls shrug off better than expected/mostly in-line Chinese inflation figures.
“¢ Subdued USD demand now seemed to lend support/help limit deeper losses.
The AUD/USD pair remained under some selling pressure for the second consecutive session on Thursday, albeit has managed to trim a part of its early slide.
The pair extended its retracement slide from weekly tops, touched in reaction to RBA’s decision to maintain status quo, and continues to be weighed down by growing concerns over escalating US-China trade conflicts.
The US President Donald Trump’s announcement to raise tariffs on $200 billion worth of Chinese good – if a deal is not reached before Friday, has been one of the key factors denting demand for the China-proxy Aussie.
Meanwhile, reviving fears over a full-blown US-China trade war dampened global risk sentiment and further collaborated towards driving flows away from perceived riskier currencies – including the Australian Dollar.
Even Thursday’s better-than-expected Chinese producer price index (PPI), rising 0.9% y/y in April as against 0.6% anticipated, and mostly in-line consumer price index (CPI) did little to lend any support to the major.
However, the ongoing slide in the US Treasury bond yields kept the US Dollar bulls on the defensive and turned out to be the only factor lending some support to the pair/limit deeper losses, at least for the time being.
Moving ahead, today’s US economic docket, along with a scheduled speech by the Fed Chair Jerome Powell will now be looked upon for some fresh impetus later during the early North-America session.
Technical levels to watch
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