The euro and commodity currencies started the new week on the defensive, with the Australian dollar slipping to a fresh five-week low as the market reacted in dismay to more signs of weakness in the Chinese economy.
But hopes the U.S. Federal Reserve and the European Central Bank would soon add more stimulus to revive their respective economies helped limit losses in high-beta currencies like the Aussie dollar.
The Aussie slid to an early low of $1.0271, retreating from Friday’s high of $1.0355, following a report showing China’s vast manufacturing sector slowed further in July.
It then quickly recovered some ground to stand at just below $1.0300. Initial support is seen around $1.0220, the 38.2 percent retracement of its June to August rally.
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