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US dollar tumbles after weak economic data. US PMI S&P Global shows the lowest reading in more than a year. The AUD/USD pair finds resistance around 0.6960 and losses momentum.
The asset also broke above 0.6900 after the release of US economic data and peaked at 0.6962, the highest level since Thursday. The pair lost momentum and pulled back under 0.6950.
The August preliminary US S&P Global PMI report came in below expectations, particularly the Service sector index that plunged to 44.1 against expectations of a recovery to 49.2. The numbers increased concerns about the health of the US economy.
The demand for Treasuries surged after the reading, pushing US yield sharply to the downside and at the same time weakening the greenback. The DXY dropped from above 109.00 to 108.10, it is hovering around 108.45, down by 0.48%.
During the last hour, the dollar stabilized and trimmed losses. Still, it remains negative for the day, about to post the first decline in days. The main trend is still bullish for the dollar. Attention now turns to the Jackson Hole symposium that will start on Thursday. Fed Chair Jerome Powell will deliver a speech on Friday.
Earlier on Tuesday, the Australian PMI came also below expectations. The S&P Global Composite dropped below 50 for the first time since January.
