The Australian dollar had already slipped to the lowest levels since July. The general slide of commodity currencies and also with weak inflation looming on the Aussie. Yet from these lows, the Aussie is fighting back.
One reason for the rise is the October Business Conditions figure. It jumped from 14 to 21 points. The confidence measure also advanced, from 7 to 8 points. The bigger event coming out of Australia this week is the jobs report on Thursday.
China, Australia’s No. 1 trade partner, also published quite a few economic indicators. The most relevant index for Australia is the industrial output release. This came out slightly below projections, a rise of 6.2% y/y against 6.3% projected and 6.8% reported beforehand.
Other Chinese measures were not really beating forecasts: fixed asset investment increased by 7.3% as expected and lower than the previous month. Retail sales missed estimates by rising by 10% y/y instead of 10.5%.
All in all, the Aussie focused on the domestic data and not the Chinese figures. And, this was good enough for a recovery, or at least to fight back.
AUD/USD rose to 0.7638 from the lows of 0.7609. While this is not a huge jump, it shows us that the breakout is not confirmed. Support is only at 0.7565 and the pair not going there. Resistance is at 0.7730.
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