The Australian dollar hits another multi-year low

© Getty

The Australian dollar tumbled to fresh multi-year lows on Tuesday before rallying higher into the close.

Here's the scoreboard at 7am in Sydney.

AUD/USD0.7120,0.0006,0.08%

AUD/JPY79.45,0.41,0.52%

AUD/CNH4.8947,0.0094,0.19%

AUD/EUR0.6135,0,0.00%

AUD/GBP0.5463,0.0002,0.04%

AUD/NZD1.0905,0.0009,0.08%

AUD/CAD0.9304,-0.0057,-0.61%

After beginning the day at .7114, the AUD/USD spent much of the Asian session taking its cues from the offshore traded yuan, or CNH, initially falling, then rising, before coming under pressure once again.

The latter occurred at the start of European trade, coinciding with news that China is seeking permission from the World Trade Organization (WTO) next week to impose $US7 billion a year in sanctions on the US for non-compliance with a ruling in a dispute over dumping duties.

That, along with more robust US economic data -- NFIB small business optimism and JOLTS job openings both hit record highs -- saw the AUD/USD tumble to as low as .7085, the lowest level since February 2016.

However, after hovering around the lows for several hours, the Aussie climbed higher in the latter parts of the session, helped by strength in US stocks, a surge in crude futures and renewed optimism over US and Canadian trade negotiations, something that helped the Canadian dollar to surge higher, dragging commodity-linked currencies along with the ride.

In the end, the AUD/USD closed the session fractionally higher at .7122.

© Supplied AUD/USD Hourly Chart

Reflecting improved investor sentiment seen during the session, the Aussie also managed to crawl higher against most of the major crosses except the CAD.

Turning to the day ahead, and with trade uncertainty still elevated, it looks set to be another session where sentiment and moves in Chinese markets, especially the yuan, will dictate the direction of the Aussie.

On the data front, the only release domestically will be the Westpac-MI consumer sentiment report for September, a report that has lost its market-moving clout in recent years. Since the August survey was conducted, Australia has seen political turmoil in Canberra and out-of-cycle mortgage rate increased from many lenders, pointing to the risk of a downside shift in sentiment.

The report will be released at 10.30am AEST.

There's very little on the economic calendar elsewhere in the region.

Later in the day, data highlights include Eurozone industrial output, Spanish CPI along with producer price inflation in the US, a report that will help firm up expectations for the US CPI report released on Thursday.

On the central bank front, James Bullard of the St Louis Fed and Fed Governor Lael Brainard -- both seen as policy doves -- are scheduled to deliver speeches. The Fed will also release it latest Beige Book on economic conditions.