Chinese data stems dollar losses

THE dollar has recovered some of its overnight losses due to better than expected Chinese data.

The Aussie fell to its lowest point since August 2010 after the greenback got a boost greenback.

THE Australian dollar has recovered some of its overnight losses due to better than expected Chinese manufacturing data.

At 12pm AEST today, the local unit was trading at 89.93 US cents, down from 90.36 cents yesterday.

The Aussie fell overnight after the US dollar was boosted by the revelation that some US policy makers said tapering of stimulus measures should start soon.

"A few" Federal Open Market Committee (FOMC) members "suggested that it might soon be time to slow somewhat the pace" of asset purchases, according to the minutes of the committee's last meeting.

But the Aussie was boosted this morning by a better than expected result in the HSBC Flash China Manufacturing Purchasing Managers' Index, which came in at a four month high, Forex.com research analyst Chris Tedder said.

"The Aussie suffered overnight, as most of the majors have, on the back of the broad push towards the US dollar, sparked by the FOMC meeting minutes," Mr Tedder said.

"But it's since recovered a bit on the surprisingly better than expected manufacturing data out of China and is now flirting with a pretty critical resistance zone around 90 US cents.

"Assuming there are no more surprises, that Chinese data should support the currency to prevent significant losses, but a sustained push above 90 is not something we're looking for at the moment.

"On a longer time frame, the market is more focused on the FOMC and the Fed's tapering story."

Meanwhile, Australian bond futures prices were lower.

At 12pm AEST, the September 10-year bond futures contract was at 95.890 (4.110 per cent), down from 96.020 (3.980 per cent) yesterday.

The September three-year bond futures contract was at 97.120 (2.880 per cent), down from 97.220 (2.780 per cent).

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