Australian dollar was trading with a slight retreat against its US peer on Tuesday, following the release of weak business confidence data out of Australia and in expectation of the crucial retail sales report from the United States.
AUD/USD fell to its lowest point on Tuesday at 0.9099 at 0:40 GMT, after which the pair consolidated at 0.9144, down by 0.04% for the day. Support was expected at August 8th low, 0.8974, while resistance was to be encountered at August 12th high, 0.9221.
The National Australia Bank (NAB) said in a report today that business confidence in Australia declined to the lowest in eight months, as demand for goods by China decreased and dimmed Australian economic outlook. The index, gauging business confidence, dropped to a reading of -3 in July from 0 in June, as values below zero are a signal that the majority of correspondents in the survey by NAB were pessimistic. A separate survey, regarding business conditions in the country, including profitability, employment levels and received orders, showed that its corresponding index remained on four-year low at -7 in July, where it stood a month ago. It became clear that companies in western Australia, which were among the major participants in the mining sector boom, giving support to the economy for the past decade, were also among the biggest pessimists, according to NAB.
In the mean time, the US dollar firmed its positions against most of its peers on Monday ahead of the retail sales report due to be released out of the United States today, which may provide clues that economic recovery was on its way and the Federal Reserve Bank may begin tapering its bond purchases.
The Aussie was trading lower against the euro, as EUR/AUD cross added 0.14% to 1.4563 at 8:18 GMT. On the other hand, AUD/NZD pair was gaining 0.06% for the day to trade at 1.1430 at 8:19 GMT.
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