Investing.com - The Australian dollar traded lower against its U.S. rival during Tuesday’s Asian session amid signs of profit-taking in the Aussie.
In Asian trading Tuesday, AUD/USD fell 0.31% to 0.9120. The pair was likely to find support at 0.9087, the low of August 9 and resistance at 0.9318, the high of July 24.
Amid a spate of challenging headlines, including another interest rate reduction by the Reserve Bank of Australia, the Aussie started rallying against the greenback last week, bouncing off a seven-week low to move to a two-week high.
Last week, the Aussie was boosted after official data showed that Chinese industrial output rose significantly more-than-forecast in July and consumer price inflation remained unchanged.
Industrial production in China rose 9.7% last month, beating expectations for a 9.0% increase and picking up from a gain of 8.9% in June. In another report, the National Bureau of Statistics said CPI remained unchanged at 2.7% last month. Analysts expected a July reading of 2.8%. China is Australia's largest export market.
However, Tuesday’s profit-taking in the Aussie could be a sign traders are becoming increasingly concerned with the rate differential Australia and the rest of the developed world. RBA pared Australia's benchmark interest rate to 2.5% last week, but that is about 10 basis points below the yield on 10-year U.S. Treasurys.
Looked at another way, investors have little incentive to embrace riskier Aussie-denominated assets when U.S. government bonds, a supposedly risk-free asset class, offer higher yields.
Elsewhere, AUD/JPY rose 0.07% to 88.72 while AUD/NZD fell 0.07 % to 1.1416.
In Asian trading Tuesday, AUD/USD fell 0.31% to 0.9120. The pair was likely to find support at 0.9087, the low of August 9 and resistance at 0.9318, the high of July 24.
Amid a spate of challenging headlines, including another interest rate reduction by the Reserve Bank of Australia, the Aussie started rallying against the greenback last week, bouncing off a seven-week low to move to a two-week high.
Last week, the Aussie was boosted after official data showed that Chinese industrial output rose significantly more-than-forecast in July and consumer price inflation remained unchanged.
Industrial production in China rose 9.7% last month, beating expectations for a 9.0% increase and picking up from a gain of 8.9% in June. In another report, the National Bureau of Statistics said CPI remained unchanged at 2.7% last month. Analysts expected a July reading of 2.8%. China is Australia's largest export market.
However, Tuesday’s profit-taking in the Aussie could be a sign traders are becoming increasingly concerned with the rate differential Australia and the rest of the developed world. RBA pared Australia's benchmark interest rate to 2.5% last week, but that is about 10 basis points below the yield on 10-year U.S. Treasurys.
Looked at another way, investors have little incentive to embrace riskier Aussie-denominated assets when U.S. government bonds, a supposedly risk-free asset class, offer higher yields.
Elsewhere, AUD/JPY rose 0.07% to 88.72 while AUD/NZD fell 0.07 % to 1.1416.