Investing.com - The Australian dollar staged a mild rebound on Tuesday on better than expected retail sales and ahead of a central bank review of interest rates with expectations it will stand pat at a record low 2%.
In Australia June retail sales rose 0.7%, above the 0.5% gain seen, and up 0.8% quarter-on-quarter in the second quarter, while the trade balance for June showed a deficit of A$2.9 billion, a bit below the A$3.1 billion expected.
Separately, Japan said June total average wages fell 2.4% year-on-year for the first drop in seven months.
AUD/USD traded at 0.7288, up 0.03%, while USD/JPY changed hands at 124.03, flat.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.11% at 97.70.
Overnight, the dollar pared gains against the other major currencies on Monday, after data showed U.S. manufacturing activity expanded at a slower rate than expected in July, fuelling speculation that the Federal Reserve could delay raising interest rates.
The Institute for Supply Management reported that its index of purchasing managers fell to 52.7 last month from a reading of 53.5 in June. Analysts had expected the manufacturing PMI to hold steady at 53.5 in July.
The report came shortly after data showed that U.S. personal spending rose 0.2% in June, in line with expectations. Personal spending increased by 0.7% in May, whose figure was revised from a previously estimated gain of 0.9%.
The report also showed that U.S. personal income rose 0.3% in June, exceeding expectations for an uptick of 0.2%. Personal income rose by 0.4% in May, whose figure was revised from a previously estimated increase of 0.5%.
Data on Monday showed that the euro zone's manufacturing sector continued to expand at a steady pace at the start of the third quarter.
Continuing expansion in Germany, Spain and Italy offset a record contraction of the Greek manufacturing sector last month after capital controls were imposed to avert a collapse of the country's financial system.
The dollar received a boost after weak Chinese factory data on Monday added to concerns over a slowdown in the world’s second-largest economy.
The final reading of the Caixin/Markit China manufacturing purchasing managers' index fell to 47.8 in July, the lowest since July 2013, from 49.4 in June. It was the fifth straight month of contraction.