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AUD/USD erases daily gains, turns red below 0.6900

  • Manufacturing PMI data from China disappointed on Thursday.
  • US Dollar Index struggles to recover Wednesday's losses.
  • FOMC is likely to remain on a wait-and-see mode for the foreseeable future.

The AUD/USD pair capitalized on the broad USD weakness during the Asian session on Thursday and ignored the disappointing Manufacturing Purchasing Managers' Index (PMI) data from China to reach its highest level since late July at 0.6930. 

US-China trade worries weigh on antipodeans

However, resurfacing worries over the US and China failing to reach a trade agreement made it difficult for antipodeans to preserve their strength. As of writing, the AUD/USD pair was down 0.15% on the day at 0.6893. Citing sources familiar with the matter, Bloomberg on Thursday reported that China is unwilling to compromise on structural changes and is doubting a long-term trade deal with the US will be possible.

On the other hand, the US Dollar Index, which posted losses for the third straight day on Wednesday after the FOMC refrained from delivering a clear message that they will be pausing rate cuts, extended its losses toward the 97 handle.

Ahead of the core Personal Consumption Expenditures (PCE) Price Index data, the Fed's preferred measure of inflation, the US Dollar Index is down 0.2% on the day at 97.24.

In the early trading hours of the Asian session, the AiG Performance of Manufacturing Index and Commonwealth Bank Manufacturing PMI data from Australie will be looked upon for fresh impetus.

Technical levels to watch for

 

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