The Australian and New Zealand dollars suffered a setback on Wednesday as disappointing Chinese economic data chilled some of the cheer caused by a temporary easing in the Sino-US trade dispute.
The Aussie dollar eased to $0.6785, from an offshore top of $0.6819, but kept above important support at $0.6750. A break of major resistance at $0.6822 is needed to keep the bounce going.
The kiwi dollar drifted to $0.6450, from a peak of $0.6470, but again held above $0.6422 support.
Both had rallied overnight when US President Donald Trump backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on holiday sales.
The reprieve prompted a pullback in the safe-haven yen, which saw the Aussie jump 2% to as high as 72.92 yen at one stage.
The mood turned sober, however, after China reported industrial output and retail sales both rose by much less than expected in July, reversing what had been a promising improvement in June.
Australian government bond futures eased a touch on the Sino-US trade news, but were only just off historic highs. The three-year bond contract dipped 2 ticks to 99.335, while the 10-year contract fell 2.5 ticks to 99.0400.
In any case, analysts had been cautioning that nothing much had really changed in the standoff over tariffs.
"Markets have rallied on the notion that Trump has blinked and is sensitive to falling stock markets," said Tapas Strickland, a director of economics at NAB.