AUD/USD rebounds from lows, trades near 0.6730 as focus shifts to US data

• Building permits in Australia declined by 9.7% in July.
• Greenback stays strong on Friday ahead of key data.
• Analysts see core PCE price index staying steady at 1.6% in July.

The AUD/USD pair extended its slide pressured by yet another batch of disappointing macroeconomic data from Australia and touched its lowest level since Monday at 0.6706. However, with the upbeat market sentiment amid a lack of major developments surrounding the US-China trade conflict helping antipodeans find demand, the pair staged a recovery and was last seen trading at 0.6730, adding 0.09% on the day.

According to the Australian Bureau of Statistics, building permits in July declined by 9.7% on a monthly basis and dragged the annual rate down to -28.5% from -25% in June. Other data from Australia revealed that the private sector credit grew by only 0.2% in July.

Inflation data to impact USD valuation

In the early trading hours of the American session, the US Bureau of Economic Analysis, which on Thursday reported that the economy was expected to expand by 2% in the second quarter, will release its Personal Consumption Expenditures (PCE) Price Index figures. Markets expect the core PCE Price Index, the Fed's preferred gauge of inflation, to remain unchanged at 1.6% on a yearly basis in July.

Ahead of this data, the US Dollar Index is up 0.1% on the day at 98.55. and a higher-than-expected reading could help the Greenback gather strength and cause the pair to test the 0.67 handle. The University of Michigan's (UOM) Consumer Confidence Survey will also be released later in the day and participants will look for the impact of the trade war on the consumer sentiment.

Technical levels to consider