The dollar edged higher versus a basket of currencies and the Australian dollar slipped on Wednesday, as fresh signs of a slowdown in China's manufacturing sector dampened appetites for risk.
The Australian dollar had set a one-month high earlier in the session as key measures of underlying inflation in Australia were taken as reducing chances for an interest rate cut next month. Still, the data was mixed and views remained split on the likelihood of a rate trim.
The Aussie, however, declined after the flash HSBC/Markit Purchasing Managers' Index for China came in at an 11-month low in July, while the U.S. dollar pushed broadly higher. The Aussie dollar is sensitive to economic data out of China, which is Australia's biggest export market.
Market players were cautious on the near-term outlook for the greenback, which has declined after Federal Reserve Chairman Ben Bernanke recently stressed the Fed will keep rates low for a long time to come, even if it started to scale back its asset purchases.
Recent price action in the euro versus the dollar suggests that some market players are still long the dollar and such positioning could temper any gains for the greenback. Data from the U.S. Commodity Futures Trading Commission shows that in the week ended July 16, currency speculators boosted their bets in favor of the U.S. dollar to the highest in six weeks.
Source: FinFX Daily Market Analysis
The Australian dollar had set a one-month high earlier in the session as key measures of underlying inflation in Australia were taken as reducing chances for an interest rate cut next month. Still, the data was mixed and views remained split on the likelihood of a rate trim.
The Aussie, however, declined after the flash HSBC/Markit Purchasing Managers' Index for China came in at an 11-month low in July, while the U.S. dollar pushed broadly higher. The Aussie dollar is sensitive to economic data out of China, which is Australia's biggest export market.
Market players were cautious on the near-term outlook for the greenback, which has declined after Federal Reserve Chairman Ben Bernanke recently stressed the Fed will keep rates low for a long time to come, even if it started to scale back its asset purchases.
Recent price action in the euro versus the dollar suggests that some market players are still long the dollar and such positioning could temper any gains for the greenback. Data from the U.S. Commodity Futures Trading Commission shows that in the week ended July 16, currency speculators boosted their bets in favor of the U.S. dollar to the highest in six weeks.
Source: FinFX Daily Market Analysis