On Tuesday the Australian and New Zealand dollars recovered from a steep fall caused by turmoil in the Chinese equity market.
AUD/USD hit 0.7233 during late Asian trade, the session high; the pair subsequently consolidated at 0.7181, rising 0.39%.
NZD/USD was last at 0.6483 after hitting 0.6540 during late Asian trade, the session high.
The Aussie was higher against the New Zealand dollar, with AUD/NZD rising to 1.1057.
Earlier Tuesday, the Reserve Bank of New Zealand reported that its inflation expectations for the next two years were unchanged at 1.9% in the third quarter.
On Monday the Aussie hit a six-year trough against the greenback, while the kiwi dollar was also at a six-year low vs the greenback, as shares in China dropped over 8%, erasing all of the year’s gains.
The drop came as Beijing held off from launching fresh measures
to buoy equities after markets fell 11% last week.
The steep fall in Chinese equity markets dampened investor confidence in the
government’s ability to revitalize economic growth which has recently been shrinking more than expected.
On August 11 China devalued its national currency, the renminbi, and global financial markets have been roiled since that time.
Elsewhere, stock futures rose on Tuesday, which was mirror opposite of action seen in futures market early Monday. Gains were gradually erased, however, with futures for the S&P 500 index rising 19.30 points, or 1%, to 1,889.50. Those for the Dow Jones Industrial Average jumped 161 points, or 1%, to 15,873. Futures for the Nasdaq 100 index added 24 points, or 0.6%, to 4,027.25. Those gains came in the aftermath of the most volatile sessions in years for Wall Street on Monday, which finished with the S&P 500 and Nasdaq Composite in correction territory.
