- AUD/USD fails to extend the previous recovery amid negative trade/political news for its largest customer China.
- Speech from RBA’s Lowe, a quarterly monetary policy statement from the RBA and China CPI become crucial to follow.
With the US exerting additional pressure on China, AUD/USD remains on the back foot around 0.6800 during the initial Asian session on Friday.
As per the latest news report from Bloomberg, the US delays licenses to do business with China’s Huawei. One American News Networks (OANN) offers another news that says that the US is considering ending talks with China and further sanctions like stopping visas of Chinese students, removing Chinese authorities from international organizations if Beijing uses the military to crackdown on Hong Kong protests.
China is Australia’s largest customer and hence any negative news for the dragon nation weigh on the Australian Dollar (AUD). The reports gain additional attention during the present times when the US and China are at loggerheads over the trade deal.
The Aussie pair recovered on Thursday, despite the US banning some of the Chinese companies’ products for government departments, after China’s trade data pleased Antipodeans.
It’s an important day for the Aussie traders as it comprises speech from the Reserve Bank of Australia’s (RBA) Governor Philip Lowe, the central bank’s quarterly monetary policy statement and China’s July month inflation data.
While YoY release of China’s Consumer Price Index (CPI) isn’t expected to deviate from 2.7%, likely improvement in MoM figure, to 0.2% versus -0.1%, can lure buyers. Elsewhere, investors will keep an eye over RBA signals to predict chances of further rate cuts while trade/political news to offer background music.
Technical Analysis
Buyers targeting May month low of 0.6862 will be on the lookout of a sustained break beyond 0.6831/32 area comprising June and July month bottoms. Alternatively, 0.6750/45, 0.6700 and 0.6677 could flash on sellers radar during further declines.
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