Aussie and kiwi fall after Chinese yuan devaluation

The Australian and New Zealand dollars fell sharply on Tuesday after China surprised the markets by devaluing the yuan in an effort to lift exports, following disappointing data over the weekend showing Chinese exports fell.

The Australian dollar slipped around 1 percent to $0.7343, from a three-week high of $0.7440. The aussie was moving closer to a six-year trough of $0.7234 touched last month. Immediate support was found around $0.7314.

The decline in the AUD came after China’s central bank allowed its yuan to weaken to levels last seen in 2012 and said it was aiming for a depreciation of 2 percent.

Meanwhile, the Australian dollar was put under further pressure after a survey showing Australian business confidence and conditions weakened in July in spite of relatively healthy sales and profits. The NAB business confidence survey for July came in at 4, down from 8 in June on business confidence and to 6 from 10 on conditions with the outlook for employment weighing.

The New Zealand dollar was also impacted by the Chinese yuan devaluation and the kiwi fell 0.9 percent to $0.6559, pulling closer to a six-year low of $0.6490 set last week. Support was found around $0.6550.

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