Aussie Looks Past Increased FDI In China, Eyes Bernanke Testimony
THE TAKEAWAY:Chinese FDI increases in June but not evident of recovery > Investors look toward Bernanke testimony > AUD/USD slightly higher
The Aussie traded marginally higher against the US Dollar as foreign direct investments in China grew 20.1 percent year-over-year in June, beating expectations of a 0.7 increase. This marks the largest increase since March 2011. Foreign investment is one catalyst for economic growth, and this improvement could suggest rising confidence for doing business in China. However, Ministry of Commerce Spokesman Shen Danyang noted shortly after the release that the data was not enough evidence to conclude an FDI recovery. As Australia's largest trading partner, a pickup in Chinese economic growth may reduce the scope for RBA interest rate cuts, boosting the Aussie.
Investors are likely looking toward Federal Reserve Chairman Bernanke’s testimony scheduled for later today at 14:00 GMT to weigh their expectations for Fed policy.
Source: FXCM Marketscope
Jimmy Yang, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.