Aussie Dollar Focus Elsewhere as Chinese Consumers Perk Up
- Chinese consumers perked up in December, according to the Westpac MNI index
- However, the Australian Dollar’s focus was elsewhere and it was unable to capitalize
- That said, the technical charts look quite good for AUD/USD bulls
The Australian Dollar remained under pressure against its generally stronger US cousin on Wednesday despite news that Chinese consumers were feeling more perky last month.
The Westpac MNI consumer sentiment index rose to 116.6 in December, rising from the previous month’s 114.9, which was the weakest print since August. The series is quite volatile though, and the current trend if any looks hard to discern.
The Australian unit might have been expected to gain on these numbers. It is often the market’s favoured liquid China proxy given Australia’s close export ties to the world’s number two economy. However, the backdrop this time was one of general US Dollar strength following Tuesday’s punchy US manufacturing data. That sent the greenback up to fourteen-year peaks against its major traded rivals and was more than enough it seems to overcome any Aussie impetus that the Chinese news may have provided.
Still, today’s outcome looks quite hopeful in the longer term, especially given the continued rhetorical tensions between US President-elect Donald Trump and the administration in Beijing. It seems that Chinese consumers, at least, are not letting those get them down.
AUD/USD slipped a little from 0.72308 just before the data to 0.72256 right after it. However, DailyFX currency analyst David Song cautions that the Aussie could be in line for a strong recovery, AUD/USD having failed to slide below strong technical support at 0.7145.
Meandering lower, AUD/USD
Chart compiled using TradingView
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--- Written by David Cottle, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.