AUD/USD battles near 0.7520 on USD gains and risk-off mood
- AUD/USD manages to gain some traction post mixed China PMI.
- US dollar retreats from the higher levels and remains elevated.
- AUD remains vulnerable to market volatility and trade tensions with China.
AUD/USD pares some of the previous session’s low on Tuesday in the initial European trading hours. The pair opened lower and rebounded to the daily highs in 20 pips movement.
At the time of writing, AUD/USD is trading at 0.7521, up 0.13% for the day.
The US Dollar Index (DXY) stands at 92.03 with almost unchanged since the Asian session began. Investors turns to safe haven assets amid concerns over the spread of the highly transmissible COVID-19 Delta variant.
Meanwhile, US Federal Reserve Governor Christopher Waller said on Tuesday that the central bank might start talking about tapering to make room for raising interest rates in late 2022.
On the other hand, the Australian dollar is weighed down amid risk aversion after a fresh lockdown imposed in some Australian cities. On the domestic data front, the Private Sector Credit rose 0.4% in May compared to the previous month’s reading at 0.2% gains.
In addition to that, China’s Manufacturing Purchasing Managers Index (PMI) came at 50.9 in June, slightly above the market forecast but lower than the previous month’s reading at 51. The Non Manufacturing PMI lowered to 53.5 in June, much lower than May's reading at 55.5.
The PMI readings remained above the 50 mark, which indicates a slower pace of growth and separates from contraction on a monthly basis.
As for now, the dynamics around the US dollar continue to influence the pair’s performance in the short term.
On the economic docket, US ADP Employment Change data watched over to gauge the market sentiment.
AUD/USD additional levels