China’s Negative surplus puts pressure on the Aussie. Also contributing to the Aussie’s weakness could be the US dollar’s rebound.

China’s Caixin Manufacturing PMI came in as 50.6 versus 51.3 forecasts and 50.9 prior. This gives a suggestion that the activity figures from Australia’s largest customer contrast the upbeat official readings published earlier in the week.

Other Australian data was a mixed bag with retail sales falling a smaller-than-expected 0.8% in February, while the trade surplus missed forecasts at A$7.5 billion ($5.69 billion) because of a surprisingly sharp rise in imports. Much more emphatic were Home loan monthly figures showing -1.7% versus expectation of 12.3% delivering a windfall to consumer wealth and confidence.

But the surge has done little to shake the Reserve Bank of Australia’s (RBA) commitment to super-loose policy, which is focused on driving unemployment down to levels that will lift wage growth and inflation.

“With this in mind, we expect the RBA to remain dovish, despite rapidly rising housing prices and growth in new housing finance,” said Paul Bloxham, Australia chief economist at HSBC.”We expect the RBA to keep its cash rate and 3-year yield targets at 0.10% in 2021 and 2022, and to extend its QE programme beyond October.”

News of no fresh covid cases in New South Wales (NSW) and an absence of further covid lockdown in Brisbane gave a helping hand to Aussie.

US President Joe Biden’s $2.25 trillion infrastructure spending plan, Positive US data and the hopes of faster economic recovery on strong vaccination drive in America and the UK supports the US dollar.

AUD/USD 4 Hour Chart:

Support: 0.7576 (S1), 0.7558 (S2), 0.7528 (S3).

Resistance: 0.7625 (R1), 0.7655 (R2), 0.7673 (R3).

China’s negative surplus along with other downbeat data and stronger US dollar sentiment puts pressure on the Aussie and we expect a bearish trend for AUD/USD.