Low Chinese inflation data and falling Australian lending finance figures provided good support for the Australian dollar on Tuesday, despite the overall downward trend for the currency.
The Aussie was trading around US70.54&cent; on Tuesday afternoon, around the same level it was trading at on Monday.  
Domestically, lending to investors fell at the fastest monthly pace in eight years in   September, according to the Australian Bureau of Statistics, as lending restrictions and higher borrowing costs stemmed the appetite for residential property.
Finance extended to investors fell 8.5 per cent to a seasonally adjusted $12.3 billion from $13.5 billion in   August - the biggest monthly pace of decline since   August 2008, when lending dropped 9 per cent.
In the 12 months to   September lending to first home buyers rose 1.6 per cent to $34 billion, from $33.8 billion in the year to   August. 
The fall in investment eases the pressure on the Reserve Bank to cut interest rates further, which would weaken the Australian dollar.
"The housing finance data continues to show there's a shift away from housing lending to investors towards owner-occupiers," said Commonwealth Bank senior currency strategist Elias Haddad.
"That's a fairly encouraging development for Australia's housing market."
Overseas, China's consumer inflation waned in   October,  while the consumer price index rose 1.3 per cent in   October from a year earlier. This compares with a 1.5 per cent median estimate in a Bloomberg survey and 1.6 per cent in   September. 
The weak figures flag the need for additional stimulus as inflation remains about half the government's target pace. The People's
 Bank of China has cut interest rates six times in the past year and further cuts will weaken the Chinese renminbi in comparison to the Australian dollar.
"The slower China inflation data leaves the door open for the People's Bank of China to ease monetary policy further," said Mr Haddad.
"The expectations of more policy easing measures by the Chinese policy makers have supported the Australian dollar not only against the US dollar today but also against the New Zealand dollar."
The Aussie is continuing to trade around US1&cent; lower than before last Friday's US jobs figures, which heightened the likelihood of an interest rate rise in the US and put upward pressure on the greenback.
Mr Haddad said that despite the positive data on Tuesday, the "cyclical downtrend in the Australian dollar is intact."
"The US dollar cyclical upswing remains intact and the path of least resistance for the Australian dollar is down.
"For the Australian dollar there's scope here for it to edge lower. 
"We're looking for a break below US70&cent; in the not-so-distant future as the interest rate expectations in the US continue to adjust higher in favour of a stronger US dollar. As well, the risk of more Reserve Bank easing remains high."