AUD/USD remains near session lows after string of Aussie and China data releases
- AUD/USD keeps losses as Australia's NAB indices remain in the negative territory.
- China's factory-gate prices register a bigger-than-expected decline in April.
- Escalating Australia-China trade tension continue to weigh on the Aussie dollar.
AUD/USD continues to trade in the red at session lows near 0.6445 following the release of the dismal Aussie Business surveys and the disappointing China factory-gate inflation.
National Australia Bank's Business Confidence rose to -46 in April from March's -66 and Business Conditions ticked higher to -34 from -21 in March. Both indices were expected to improve as the Reserve Bank of Australia cut rates to zero and announced a bond purchase program at the end of March. Another possible reason for the recovery in the business confidence could be optimism stemming from Australia's success in containing the coronavirus outbreak.
However, despite the improvement, both indices remained in the red and have so far failed to put a bid under the Aussie dollar.
Moreover, China's data, which hit the wires along with the NAB indices, are painting a negative picture of the world's second-largest economy. China's Producer Price Index or factory-gate prices fell by 3.1% versus expectations for a 2.6% drop and down from March's -1.5% reading. The Consumer Price Index came in at -0.9% versus expectations for a 0.5% decline and up or down from the preceding month's print of -1.2%.
The bigger-than-expected decline in China's factory-gate prices is bad news for commodities and commodity dollars like the AUD.
In any case, investors are shunning risk and offering growth-linked currencies like the Aussie dollar on Tuesday, seemingly due to escalating trade tensions between Australia and China. According to ABC News, China has imposed an import ban on four Australian abattoirs. The news has come just days after China flagged plans to introduce an 80% tariff on Australian barley.
Technical levels