AUD/USD is down 0.4% today, keeping near the lows in European trading

The pair is down 0.4% on the day to around 0.7338 currently, hovering near the lows as the more defensive risk mood and softer China data weigh on the aussie.

That said, in the context of the past few days, this fits with the push and pull price action seen in the pair that has been prevailing since four weeks ago:

AUD/USD D1 16-08

The daily chart shows that the pair is largely consolidating between 0.7300 and 0.7400 for the most part and there isn't anything to suggest a break from that for now.

Lower Treasury yields proved to be a drag for the dollar on Friday, adding to the poor US consumer sentiment data. However, today's move lower in yields has an element of risk aversion to it and that is weighing on the aussie more.

Adding to the latter's woes is the virus situation in Australia, which saw a jump in cases in NSW over the weekend and Melbourne extending lockdown for another two weeks.

That will further dampen the RBA outlook in the weeks/months ahead and put further pressure on the currency. While not as evident against the dollar, the divergence against the kiwi is still rather stark as AUD/NZD hits fresh lows for the year today:

AUD/NZD D1 16-08