Aussie Remains Strong, Supported by China
The Australian dollar maintained its strength during Asian trading on Monday (August 3), despite the AUD/USD pair undergoing a brief correction after opening with an upward gap. The pair traded around the 0.7030 level, holding firm in positive territory.
The Aussie's strength was underpinned by economic developments in China, Australia's largest trading partner. China's Manufacturing PMI fell to 50.9 in July from 51.7 in June, coming in below the market forecast of 51.5.
Despite the slowdown, the PMI figure remained above the 50 mark. This indicates that China's manufacturing activity is still expanding, thereby easing concerns about a potential drop in demand for Australian commodities.
The US dollar also faced pressure after Japan intervened by purchasing yen worth approximately US$58.97 billion. Additionally, improved appetite for risk assets dampened demand for the dollar as a safe-haven asset.
However, the market remains cautious as the diplomatic situation between the United States and Iran is not yet fully clear. As long as the AUD/USD pair holds above 0.7000, the Australian dollar has the potential to sustain its gains, although geopolitical sentiment could trigger fresh volatility.
Source: Nesmaker.id
