Investing.com - The Australian dollar rose against its U.S. counterpart on Tuesday, pulling away from the previous session's six-year trough as the currency recovered from global turmoil caused by a broad sell-off in Chinese equities.
AUD/USD hit 0.7233 during late Asian trade, the session high; the pair subsequently consolidated at 0.7174, rising 0.27%.
The pair was likely to find support at 0.7050, Monday's low and a six-year low and resistance at 0.7317.
The Australian dollar hit a six-year trough against the greenback on Monday, as shares in China dropped over 8%, erasing all of the year’s gains.
The decline came as Beijing held off from implementing fresh measures to support equities after markets fell 11% last week. The steep declines in Chinese equity markets undermined investor confidence in the government’s ability to revitalize economic growth.
Financial markets have been roiled since China devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate.
The Aussie was higher against the New Zealand dollar, with AUD/NZD rising 0.21% to 1.1065.
Earlier Tuesday, the Reserve Bank of New Zealand reported that its inflation expectations for the next two years were unchanged at 1.9% in the third quarter.