The Australian dollar rebounds to 0.7326 from the intraday low of 0.7256 (+70 pips) as traders brushed off the 8.5% Monday decline of the Shanghai Composite Index - the biggest one-day drop in eight years and while the commodity prices slid dragging down the global stock market with it in yesterday's market.
Since the Tuesday open of the Shanghai Composite Index, the australian dollar has been shadowing the move of the Chinese stock market which pushed the Aussie dollar down from 0.7305 to 0.7256 from the late NY session to the Asian mid morning hours. Although the Chinese equities fell once again on Tuedsay, the decline was modest, while the European stocks managed to recover, and as the market shifted its attention to 2-day meeting of the Fed.
The aussie traded in a choppy and volatile session from late NY to early Europe and has managed to rebound and hold its gains to the 0.7320 level aided by both risk appetite and AUD/JPY cross buying demand. The aussie rose sharply from the low of 89.33 to 90.58 on the intraday chart (+125 pips) which gave impetus to the AUD/USD. Resistance at 0.7325.
Charts: WorldWideMarkets Alpha Trader