Investing.com - The Australian dollar eased in early Asia on Wednesday as investors eyed market sentiment in the wake of China's overnight cuts in rates and the cash reserve ratio.
AUD/USD traded at 0.7121, down 0.13%, while USD/JPY changed hands at 118.89, up 0.02%. EUR/USD was quoted at 1.1535, up 0.14%.
Ahead, data releases start in New Zealand with the July trade balance is due at 1045 local time (2145 GMT). The trade balance is expected to be in deficit again following a gap previously.
In Japan, at 0850 Tokyo time (2350 GMT), the July service producer price index is due. The index came in at 0.4% in the previous month.
In Australia today, the second quarter construction work done data is scheduled for 1130 Sydney (0130 GMT). There's also speech by RBA Governor Glenn Stevens but no detail of time and topic of the speech has been provided yet.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.08% to 93.99.
Overnight, the dollar held gains against the other major currencies on Tuesday, after upbeat U.S. economic reports and after China’s central bank cut interest rates in a bid to bolster economic growth after a plunge in the country’s stock market.
The People’s Bank of China cut interest rates by 25 basis points to 4.6%. The bank also cut the reserve requirement ratio for large lenders to 18.0%.
Fears over a global economic downturn, led by a slowdown in China’s economy have intensified in recent days, accelerating a selloff across global markets.
Asian and European stocks rebounded on Tuesday, but shares in China and Japan continued to slump.
Shares in Shanghai fell around 8% overnight, one day after the worst trading session since 2007, dubbed ‘Black Monday’.
Recent steep declines in Chinese equity markets have sparked fears that they will weaken the world’s second largest economy and undermined investor confidence in the government’s ability to revitalize economic growth.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears over the condition of the economy.
In the U.S., the Conference Board said its index of consumer confidence jumped to a seven-month high of 101.5 this month from a reading of 91.0 in July. Analysts expected the index to rise to 93.4 in August.
Data also showed that U.S. new home sales rose by 5.4% to 507,000 units last month, compared to expectations for a gain of 5.8% to 510,000.