The Australian dollar (AUD) is currently in need of a lift, with recent developments hindering its growth, primarily influenced by China.
Throughout Wednesday, the AUD/USD pair has experienced a consistent decline. As of now, the AUD/USD quote stands at 0.6684. The previous trading session proved to be quite volatile for the Australian dollar, driven by the Reserve Bank of Australia's decision to maintain the interest rate at 4.10% per annum. However, by the end of the day, the AUD managed to regain some ground and conclude with a positive outcome.
Today, the overall positive sentiment surrounding AUD has been affected by data emanating from China. The Caixin Services PMI for June has dropped to 53.9 points, compared to the previous reading of 57.1 points. The forecast had suggested a potential decline to 56.2 points, but the current value marks the lowest in five months. Chinese consumers are reducing their spending due to dim income prospects and an uncertain job market. These signals from China have a detrimental impact on Australia, as China serves as its primary trading and economic partner.
Furthermore, the USD has shown strength this morning, placing additional pressure on AUD positions.