Forex - Aussie weaker ahead of China prices data, NAB confidence

Investing.com - The Australian dollar held weaker in early Asia on Tuesday ahead of a fairly busy data day with prices in China in focus.

AUD/USD fell 0.18% to 0.7690, while USD/JPY changed hands at 124.60, up 0.09%. EUR/USD traded at 1.1281, down 0.10%.

Chinese CPI and PPI data for May are due at 0930 local time or 0130 GMT, with month-on-month consumer prices seen flat and producer prices down 4.5%. The data has been volatile of late and thus waning in importance as to market direction.

Later, Australia receives data on Home Lending for April, and the key focus on the investment lending sector, with a drop of 2% expected. Also at the same time, the NAB business confidence survey for May is due with the last reading showing plus-3.

Anecdotal evidence suggests housing is slowing, but with Sydney auction clearance rates remaining in the mid 80%s on the weekend, perhaps there's room for an upside surprise - again.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.01% to 95.21.

Overnight, the dollar remained broadly lower against a basket of other major currencies on Monday, as investors continued to lock-in profits from the greenback's recent rally and as trading remained quiet with no major U.S. economic reports to be released throughout the session.

The dollar strengthened broadly after the Labor Department reported on Friday that the U.S. economy added 280,000 jobs in May, ahead of economists forecast for 220,000.

Hourly earnings increased 0.3% in May, after a 0.2% increase in April.

The upbeat data, particularly the pick-up in wage growth underlined the view that the economy is on track to rebound after a weak first quarter and bolstered expectations that the Federal Reserve could start to hike interest rates at its September policy meeting.


EUR/USD climbed 0.86% to 1.1212 as German 10-year bund yields move higher, re-approaching last week’s nine-month peak.

German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.

The recent rally in bund yields has been spurred by signs of an economic recovery in the euro area.

But investors remained cautious after German Chancellor Angela Merkel warned earlier Monday that "there isn’t much time left" to reach an agreement on a cash-for-reforms deal needed to unlock more financial aid before Greece runs out of money.

Athens delayed a key debt payment to the International Monetary Fund on Friday, saying it would repay the money along with other payments due this month by the end of June.