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Forex - AUD/USD re-approaches 6-year trough after Australian data

Published 08/27/2015, 02:32 AM
Updated 08/27/2015, 02:32 AM
Aussie slips lower vs. broadly stronger greenback

Investing.com - The Australian dollar slipped against its U.S. counterpart on Thursday, re-approaching a recent six-year trough after downbeat data from Australia and as demand for the greenback remained broadly supported.

AUD/USD hit 0.7099 during late Asian trade, the session low; the pair subsequently consolidated at 0.7107, edging down 0.17%.

The pair was likely to find support at 0.7067, Wednesday's low and resistance at 0.7157, Wednesday's high.

The Australian Bureau of Statistics reported on Thursday that private capital expenditure declined by 4.0% in the second quarter, compared to expectations for a 2.5% fall.

Private capital expenditure dropped 4.5% in the first quarter of 2015, whose figure was revised from a previously estimated 4.4% slide.

The Australian dollar was also affected by developments in China, Australia's biggest export partner.

Concerns over whether a free fall in China’s stocks will make the world’s second-largest economy weaker persisted. Shares in Shanghai opened higher on Thursday, after ending the previous session 1.27% lower.

Recent steep declines in Chinese equity markets have sparked fears that they will hasten an economic downturn and undermined investor confidence in the government’s ability to revitalize economic growth.

The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears over the condition of the economy.

Meanwhile, the greenback remained supported after the U.S. Commerce Department reported on Wednesday that total durable goods orders increased by 2.0% last month, compared to expectations for a decline of 0.4%.

Core durable goods orders, which exclude volatile transportation items, inched up 0.6%, topping forecasts for an increase of 0.4%.

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Investors were eyeing the release of U.S. second-quarter growth data later in the day, for further indications on the strength of the economy.

The Aussie was also lower against the euro, with EUR/AUD climbing 0.53% to 1.5972.

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