The Australian dollar weakened against the other major currencies in the Asian session on Friday, after data showed that the services sector in China continued to expand in June at a slower pace. Traders also exercised caution amid some uncertainty about the outcome of the Greek referendum on Sunday. The currency started falling earlier, following the release of nation’s disappointing retail sales data.
Data from HSBC Bank showed that the services sector in China continued to expand in June, albeit at a slower pace, with a PMI score of 51.8. That’s down from 53.5 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.
It marked the slowest increase in new business at service providers in 11 months, while new work rose only slightly at manufacturers.
The composite index came in at 50.6, down from 51.2 in the previous month and touching a 13-month low.
Data from the Australian Bureau of Statistics showed that the total value of retail sales in Australia was up a seasonally adjusted 0.3 percent on month in May, coming in at A$24.154 billion. That was shy of forecasts for an increase of 0.5 percent following the downwardly revised 0.1 percent decline in April.
Meanwhile, most Asian share markets traded lower amid uncertainty on the outcome of Sunday’s Greece referendum. A plunge in iron-ore prices overnight prompting losses in the mining sector, weighed on the Australian stock market.
Conflicting opinion polls have added to the ambiguity about whether Greeks will vote to endorse the austerity measures proposed by the country’s international creditors or reject the terms.
Greek Prime Minister Alexis Tsipras has called on Greeks to vote “no” in the referendum, which he claimed is not an up or down vote on Greece’s membership in the eurozone.
Tsipras argued that voting against the proposals offered by creditors would give the government more leverage in the negotiations.
German Chancellor Angela Merkel and Eurogroup President Jeroen Dijsselbloem have said further negotiations would have to wait until after the referendum.
Traders also await the Reserve Bank of Australia’s interest rate decision, due on July 7. The economists expect the bank to hold rates at 2.00 percent.
In other economic news, data from the Australian Industry Group or AIG, showed that Australia’s services index for June expanded to 51.2, from 49.6 in May.
Thursday, the Australian dollar fell after data showed that the trade deficit for May rose more than economists expected. The Australian dollar fell 0.15 percent against the U.S. dollar, 0.26 percent against the yen, 0.68 percent against the euro and 0.58 percent against the Canadian dollar.
In the Asian trading today, the Australian dollar fell to more than a 2-1/2-month low of 0.7566 against the U.S. dollar, from yesterday’s closing value of 0.7631. The aussie may test support near the 0.74 region.
The aussie dropped to a 4-day low of 93.24 against the yen and a 3-day low of 1.4629 against the euro, from yesterday’s closing quotes of 93.90 and 1.4519, respectively. If the aussie extends its downtrend, it is likely to find support around 91.00 against the yen and 1.48 against the euro.
Against the New Zealand and the Canadian dollars, the aussie slipped to 3-day lows of 1.1282 and 0.9519 from yesterday’s closing quotes of 1.1349 and 0.9562, respectively. On the downside, 1.07 against the kiwi and 0.93 against the loonie are seen as the next support levels for the aussie.
Meanwhile, the NZ dollar slightly fell following the China PMI data.
The NZ dollar fell to 0.6703 against the U.S. dollar, from yesterday’s closing value of 0.6716. The kiwi may test support near the 0.65 region.
Against the yen and the euro, the kiwi edged down to 82.45 and 1.6539 from yesterday’s closing quotes of 82.66 and 1.6484, respectively. If the kiwi extends its downtrend, it is likely to find support around 81.00 against the yen and 1.67 against the euro.
Looking ahead, Services PMI reports for June from major European economies and Eurozone retail sales data for May are due to be released in the European session.
U.S. markets will be closed in observance of Independence Day.
The material has been provided by InstaForex Company – www.instaforex.com