Australian Dollar holds gains following stronger Chinese PMI data
AUD/USD gains ground for the second consecutive day, trading around 0.7170 during the Asian hours on Tuesday.
The Australian Dollar (AUD) strengthened for the second day in a row on Tuesday, trading near 0.7170. This gain came as China's Manufacturing PMI rose to 51.5 in August from 50.9 in July, exceeding expectations. Both Australia and China are significant trading partners, so fluctuations in China's economy can influence the AUD. However, Australia's Building Permits experienced a 3.6% decline in July, lower than the anticipated 4.8% drop and the prior increase of 7.2%.
Despite this, the total dwellings unit approvals grew by 9% year-over-year, outpacing the 8.9% rise in the previous period. The AUD/USD pair faces potential downward pressure from the US Dollar (USD), which has rebounded amid hawkish signals from the US Federal Reserve (Fed). The Fed's increased rate hike expectations and Goolsbee's hawkish tone in his remarks on inflation have bolstered the Dollar, potentially hindering AUD gains.
Technical analysis indicates a bullish near-term bias for AUD/USD, with the pair holding above the nine- and 50-day Exponential Moving Averages (EMAs). Immediate support levels are found at the nine-day EMA (0.7156) and the 50-day EMA (0.7071).
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