AUD/USD rebounds to 0.71 on China headlines, RBA Governor Lowe speech awaited

• Australian Minister Frydenberg denies reports of China banning Australian imports.
• US Dollar Index looks to snap 5-day losing streak.
• Coming up: Speech by RBA Governor Lowe.

The AUD/USD pair slumped to a 10-day low of 0.7070 on Thursday but was able to regain a small part of its daily losses in the last hour. As of writing, the pair was trading at 0.7095, still down around 1% on a daily basis.

Earlier today, Reuters reported that China’s Dalian port has banned Australian coal imports and the AUD came under heavy selling pressure. Meanwhile, the labour market data revealed that the unemployment rate in January remained steady at 5% with the number of employed increasing by 39.1K on a monthly basis.

Just recently,  Josh Frydenberg, Minister for Resources and Northern Australia, told ABC Radio that exports to China would continue to remain strong and basically denied Reuters’ report to help the currency gain traction. Nevertheless, ahead of the RBA Governor Lowe’s speech, the pair remains deep in the negative territory on the daily chart.

On the other hand, supported by a sharp increase in the T-bond yields, the US Dollar Index, which tracks the greenback against a basket of six major currencies, rose on Thursday to further weigh on the pair. Toward the end of the NA session, the DXY is up 0.12% on the day at 96.63.

Today’s data releases from the U.S.

• US:  Durable goods orders  rose 1.2% in December vs 1.5% expected.
• US:  Initial weekly jobless claims  decreased by 23,000 to 216,000.
• Philly Fed Manufacturing Index  plummets to -4.1 in February from 17 in January.
• US:  Markit Manufacturing PMI  drops to 53.7 in February (preliminary) vs 54.7 expected.
• US:  Existing home sales  drop 1.2% in January.

Key technical levels