The Australian dollar was under pressure again following a selloff in Chinese equities. The Shanghai composite dropped a further six percent on Tuesday – adding to the fall of over thirty percent that’s taken place since the summer.
Sterling rallied today following a surprisingly bullish report on UK inflation. Core consumer prices rose at an annualized rate of 1.2% to the month to July.
USD/JPY was trending lower following some encouraging data on the Japanese economy. The pair failed to break resistance at 124.56 and began moving to the downside.
EUR/USD showed a sharp pullback after yesterday strong gains. EUR/USD was trading down into the 1.10 area again falling around 0.5% on yesterday’s high.
USD/CAD continues to swing wildly with large levels of intraday volatility. The pair rose back above the 1.30 line again today after rallying one percent on yesterday’s dip.
In a bullish move EUR/GBP broke a critical technical resistance (as did EUR/USD) with a move above the 50-day moving average. The level around 0.7080 should now offer support.
Data affecting the US dollar was relatively upbeat today. However the main tradable event was the devaluation of the yuan which continues to send ripples throughout the market.
The Australian dollar suffered a strong downward correction today, most considerably against the US dollar. The move came after China announced it would lower the level at which the yuan trades against the greenback.