- Aussie recovery attempts from 0.6275 remain capped below 0.6325.
- Concerns over China’s zero COVID policy are hurting AUD.
- The RBA pointed to a slower monetary tightening path.
The Australian dollar on Monday gave up most of the ground gained last Friday. The pair’s retracement from the 0.6410 high found support at 0.6275, although subsequent recovery attempts remain limited below 0.6325 so far.
China concern affects the Aussie
Confirmation of Chinese President Xi Jinping’s third term in power has hit risk appetite, sending the yuan and Asian markets lower on Monday, with investors concerned his commitment to a zero-COVID policy could hurt economic growth.
Chinese data, with third quarter GDP beating expectations, have failed to lift spirits.
Furthermore, the dovish message sent out by the Reserve Bank of Australia last month, suggesting that they may slow down their path of monetary tightening, is acting as a headwind for the Aussie, which has depreciated by around 1.25%. so far in the day.
In the US, macroeconomic data has also been mixed. The Chicago Fed’s national activity index rose 0.1% versus the 0.4% decline forecast by analysts, while the S&P PMI showed economic activity in both the service and manufacturing sectors slowed. contracted exceeding expectations in October.
Technical levels to watch
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
