Back to back Economic Data misses have sent the Australian Dollar reeling. Retail sales came in .2% versus .3 % expected but with the trade balance coming in a -2.22 billion versus -1.7 billion expected , we’ve seen the reduction of weak long AUD positions that were established this morning in anticipation of a neutral RBA forward guidance
On a positive note, the China June Caixin Services PMI came in at 52.7 vs. 51.2 prior, which is providing some counterbalance to the weak Australian domestic data and halting the Aussie dollar slide just above the .75 handle
Finally, and perhaps more significantly, local traders are looking over their shoulder at today’s PBOC fix, the weakest setting since 2011 ,which sent the USD tentatively bid versus USDCNH There’s certainly some speculation and fear that today’s aggressively weaker Yuan fix is a PBoC policy driven move.
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