AUD/USD extends fall to 0.6740 as markets remain risk-averse
- Weak data from China weigh on antipodeans on Wednesday.
- Impact of US-China trade optimism fades on latest headlines.
- US Dollar Index climbs to fresh nine-day highs.
The AUD/USD closed the day with a 40-pip gain on Tuesday boosted by the renewed US-China trade optimism but reversed its direction on Wednesday as the Aussie the weight of disappointing macroeconomic data releases from China. As of writing, the pair was down 0.9% on the day at 0.6740.
Although the data from Australia earlier today showed that Westpac Consumer Confidence in August improved to 3.6% from -4.1% in July and the Wage Price Index came in at 0.6% in the second quarter to beat the market expectation of 0.5%, the AUD failed to capitalize on the upbeat figures as investors focused on Chinese data.
The National Bureau of Statistics of China on Wednesday reported that retails sales expanded by 7.6% on a yearly basis in July to fall short of experts forecast of 8.6% and the expansion rate of industrial production weakened to 4.8% from 6.3% in June.
No signs of progress in US-China trade talks
Later in the day, US Commerce Secretary Wilbur Ross told CNBC that there were no concessions from China for the US decision to delay tariffs on some Chinese imports until December 15, suggesting that there was no forward progress in trade negotiations as initially thought and further weighed on the antipodeans.
Meanwhile, the heavy selling pressure surrounding the shared currency following the disappointing growth data from Germany allows Greenback to find extra demand on Wednesday and provides an additional boost to the pair. At the moment, the US Dollar Index is up 0.15% on the day at 97.97.
During the Asian session on Thursday, labour market data from Australia will be watched closely by the market participants.
Technical levels to watch for