AUD/USD trims losses on upbeat China services PMI

• China November services PMI came-in at a five-year high of 53.8.
• The Aussie dollar – proxy for China – has trimmed losses after China PMI release, but is still down 0.35 percent on the day.
• Aussie government bond yields remain depressed and will keep Aussie in the red.

The AUD/USD pair is currently trading at 0.7313 – down 0.35 percent on the day – having clocked a low of 0.7295 earlier today.

The currency pair has trimmed losses, possibly on the back of China November services PMI, which came in at 53.8, beating the forecasted print of 50.8 by a big margin.

While the upbeat China data have helped Aussie recovery from session lows, the Australian government bond yields are still depressed. For instance, the 10-year government bond yield is currently trading 2.5 percent – down four basis points on the day – having clocked a 13-month low of 2.48 percent earlier today.

More importantly, the yields are likely to remain in the red as the Australia’s growth rate slowed sharply in the third quarter, reinforcing expectations that the Reserve Bank of Australia is unlikely to hike rates before the second half of 2020.

As a result, AUD/USD may have a tough time recovering all the way back to a session high of 0.7356.

AUD/USD Technical Levels