Investing.com – The Australian dollar was higher against its U.S. counterpart on Tuesday, as it recovered from a more than 1% drop in the previous session caused by concerns over a slowdown in Chinese growth.
AUD/USD hit 0.7215 during late Asian trade, the session high; the pair subsequently consolidated at 0.7206, rising 0.22%.
The pair was likely to find support at 0.7153, Monday’s low and a two-week low and resistance at 0.7303, Monday’s high.
The Australian dollar had broadly weakened after data on Monday showed that China’s Caixin manufacturing purchasing managers' index fell to 48.2 this month from 48.6 in December, confounding expectations for a rise to 48.9.
It was the lowest reading since September and was well below the 50-point level which separates expansion from contraction.
Markets were also jittery amid concerns over growing tensions in the Middle East after Saudi Arabia cut diplomatic ties with Iran over the weekend.
Meanwhile, the greenback remained supported even after the Institute for Supply Management said on Monday that its manufacturing PMI fell to a six-year low of 48.2 last month from a reading of 48.6 in November.
Analysts had expected the index to inch up to 49.0 in December.
The Aussie was higher against the euro, with EUR/AUD declining 0.43% to 1.5001.