Investing.com - The Australian dollar traded lower against its U.S. rival during Tuesday’s Asian session as the Aussie is now seen by some observers as fairly valued.
In Asian trading Tuesday, AUD/USD fell 0.22% to 0.9411. The pair was likely to find support at 0.9286, the low of September 17 and resistance at 0.9574, the high of June 18.
The Aussie has been supported in recent weeks by an array of factors, including improving Chinese economic data and last week’s announcement that the Federal Reserve will not taper its quantitative easing program.
On Monday, data showed that the preliminary reading of China’s HSBC manufacturing purchasing managers’ index rose to a six-month high of 51.2 in September, up from 50.1 in August. Economists had forecast a reading of 50.9. China is Australia's biggest export partner.
Factors supporting the Aussie prompted a spate of short-covering as the currency had become one of the most heavily shorted in the world just a few months ago.
According to the new CommSec iPad index, Australia is the fourth-cheapest in the world to purchase Apple’s iPad behind Malayisa, Hong Kong and Japan. That jibes with The Economist’s Big Mac index that suggested the Aussie dollar was relatively fairly valued in July, when the exchange rate was 0.9300, according to Kochies Business Builders.
That indicates the Aussie is fairly valued, though that may not be enough for the Reserve Bank of Australia, which last week said it would like to see the currency fall further. RBA has left the door open to further interest rate cuts.
Elsewhere, AUD/JPY fell 0.31% to 92.97 while AUD/NZD jumped 0.40% to 1.1310.
In Asian trading Tuesday, AUD/USD fell 0.22% to 0.9411. The pair was likely to find support at 0.9286, the low of September 17 and resistance at 0.9574, the high of June 18.
The Aussie has been supported in recent weeks by an array of factors, including improving Chinese economic data and last week’s announcement that the Federal Reserve will not taper its quantitative easing program.
On Monday, data showed that the preliminary reading of China’s HSBC manufacturing purchasing managers’ index rose to a six-month high of 51.2 in September, up from 50.1 in August. Economists had forecast a reading of 50.9. China is Australia's biggest export partner.
Factors supporting the Aussie prompted a spate of short-covering as the currency had become one of the most heavily shorted in the world just a few months ago.
According to the new CommSec iPad index, Australia is the fourth-cheapest in the world to purchase Apple’s iPad behind Malayisa, Hong Kong and Japan. That jibes with The Economist’s Big Mac index that suggested the Aussie dollar was relatively fairly valued in July, when the exchange rate was 0.9300, according to Kochies Business Builders.
That indicates the Aussie is fairly valued, though that may not be enough for the Reserve Bank of Australia, which last week said it would like to see the currency fall further. RBA has left the door open to further interest rate cuts.
Elsewhere, AUD/JPY fell 0.31% to 92.97 while AUD/NZD jumped 0.40% to 1.1310.