The Australian dollar was the worst performing major currency on Monday, as its role as a proxy for China sentiment drew waves of selling.
The 20th China Communist Party Congress concluded Sunday with China President Xi Jinping securing a precedent-breaking third leadership term.
This was factored in, but global investors were rattled by the introduction of a leadership team stacked with loyalists - prioritising China's rivalry with the U.S. over .
The market reaction was severe, with Hong Kong's Hang Seng index diving around 6.5% while U.S.-listed shares of Chinese companies.
The AUD fell 1.28% against the USD and 1.41% against the Euro despite aon hopes of a dovish Fed pivot and weak EZ PMI data - suggesting the Euro zone is heading for a .
Key for the direction of the Australian dollar will be whether investor concerns over China's growth trajectory translate into weaker commodity prices.
A fall in iron ore, copper and energy prices would undermine Australia's very strong terms of trade.
The AUD/USD managed to close above the 10-day moving average, which came in at 0.6291 on Monday and ascends to 0.6297 today.
A close below that line would warn that momentum is shifting to the downside and sets up for another move towards the 2022 trend low at 0.6170.
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