11 Aug 2015
AUD/USD tests 0.7300, loses 1 big figure on PBOC
FXStreet (Mumbai) - The AUD/USD pair remains submerged in to losses during the European session, although managed to bounced-off lows just ahead of 0.73 handle, as the Aussie suffers the most from the PBOC surprising “one-off” adjustment to the Chinese currency in a bid to boost the world’s second largest economy.
AUD/USD drops from 0.7440 levels
Currently, the AUD/USD pair trades -1.14% lower at 0.7328, clinging to 0.73 handle. The AUD/USD pair keeps heavy losses as the Aussie remains highly vulnerable to any risks to the Chinese economy, indicated by the latest PBOC move - yuan devaluation by nearly 2% against the greenback earlier today.
Although the bank argues that this is a "one-off adjustment", the offshore yuan (CNH) is trading at a discount against the CNY, strengthening the notion that there might be further room to depreciate from here, as explained by FX Street’s Chief Editor Ivan Delgado.
China remains Australia's biggest trading partner. With the devaluation of the Chinese currency, Chinese companies will have less purchasing power to purchase products from Australia.
Meanwhile markets now await US economic releases scheduled for released later today for fresh cues on the AUD/USD pair.
AUD/USD Technical Levels
The pair has an immediate resistance at 0.7400 levels, above which gains could be extended to 0.7429 (Aug 4 High). On the flip side, support is seen at 0.7300 levels from here it to 0.7261 (Aug 4 Low) levels.
AUD/USD drops from 0.7440 levels
Currently, the AUD/USD pair trades -1.14% lower at 0.7328, clinging to 0.73 handle. The AUD/USD pair keeps heavy losses as the Aussie remains highly vulnerable to any risks to the Chinese economy, indicated by the latest PBOC move - yuan devaluation by nearly 2% against the greenback earlier today.
Although the bank argues that this is a "one-off adjustment", the offshore yuan (CNH) is trading at a discount against the CNY, strengthening the notion that there might be further room to depreciate from here, as explained by FX Street’s Chief Editor Ivan Delgado.
China remains Australia's biggest trading partner. With the devaluation of the Chinese currency, Chinese companies will have less purchasing power to purchase products from Australia.
Meanwhile markets now await US economic releases scheduled for released later today for fresh cues on the AUD/USD pair.
AUD/USD Technical Levels
The pair has an immediate resistance at 0.7400 levels, above which gains could be extended to 0.7429 (Aug 4 High). On the flip side, support is seen at 0.7300 levels from here it to 0.7261 (Aug 4 Low) levels.