AUD/USD stays weak, challenging 0.7100 on China
- Spot came under increased selling pressure on Chinese news.
- Australian labour market report surprised to the upside.
- Chinese port banned imports of Australian coal.
The Aussie Dollar remains deep into the negative ground on Thursday, dragging AUD/USD to the vicinity of the 0.7100 handle.
AUD/USD supported below 0.7100
AUD remains depressed in the second half of the week following earlier news that the Dalian port, one of China’s biggest, announced it will block imports of Australian coal, adding that it will limit the overall coal imports at 12 tm this year. In this regard, it is worth mentioning that coal exports are Australia’s top earner.
The ban on coal exports totally eclipsed the auspicious report from the Australian labour market, where the Employment Change rose by 39.1K in January, surpassing estimates. In addition, the Participation Rate ticked a tad higher to 65.7% and the jobless rate stayed put at 5.0%.
Later in the day, US key releases should add some pressure to the pair.
What to look for around AUD
The unexpected news coming from China is forcing AUD to trade in multi-day lows and to chart a bearish ‘outside day’. As usual, the Aussie Dollar remains vigilant in the near term on developments from the ongoing US-China trade talks in Washington. However, any serious bullish attempts in the Aussie Dollar are expected to remain somewhat unsustainable in light of the neutral stance from the RBA, prospects of lower GDP growth and even the potential of rate cuts should the outlook deteriorates.
AUD/USD levels to watch
At the moment the pair is losing 0.79% at 0.7107 and a breakdown of 0.7085 (low Feb.21) would aim for 0.7075 (low Jan.25) and finally 0.7054 (low Feb.12). On the flip side, the next hurdle emerges at 0.7206 (high Feb.21) seconded by 0.7223 (high Jan.11) and then 0.7268 (200-day SMA).