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FXNET Daily Market Analysis - Australian Dollar Gains On Chinese Manufacturing Data

Discussion in 'Fundamental Analysis' started by fxnetltd, Dec 2, 2013.

  1. fxnetltd

    fxnetltd New Member

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    The Australian dollar was the main mover in Monday’s Asian session as a result of data from China, which is Australia’s main trading partner.

    Manufacturing PMI data from the world’s second largest economy showed that expansion in the manufacturing sector was steady at an 18-month high and eased concerns of a slowdown there which could affect the rest of the global economy.

    The official Manufacturing PMI data which was released on Sunday was as expected and the private report from HSBC today was above forecast, with both being in expansionary territory.

    Since China is a major trading partner for Australia, the news was positive for the Australian dollar. Also data that showed Australia’s building approvals were not as bad as expected helped lift the Aussie, up 0.5% in the Asian session against the USD to $0.9150.

    The main news to look forward to later today will be Euro zone PMI data. The euro gained 0.11% against the dollar in Asia to 1.3601, moving closer to a one-month high of 1.3620 hit on Friday. The euro rose 0.06% against the yen to 139.31.

    The dollar was steady at 102.41 yen, down 0.10% in the Asian session after hitting a 6-month high of 102.60 yen on Friday.

    The main driver for the USD will be Friday’s US nonfarm payrolls data. US jobs data are closely watched by the Federal Reserve, as the data will play a part in determining when it can begin tapering.
     
  2. fxnetltd

    fxnetltd New Member

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    Re: FXNET Daily Market Analysis - Australian Dollar Gains On Chinese Manufacturing Da

    Asian Session – Australian dollar rallies after strong retail sales and trade data

    The Australian dollar was the best performer today after Australian retail sales beat expectations by more than double the forecast, while the nation’s trade balance posted a strong surplus. The upbeat data lessened the possibility of a rate cut by the Reserve Bank of Australia and helped sentiment for the AUD.

    Australian retail sales jumped by 1.2% m/m versus a consensus of 0.5% while the trade surplus widened to A$1.433 billion versus a previous A$591 million and above the A$270 million forecasted.

    AUDUSD rallied to a high above 0.9030 while AUSDJPY rose to a high above 92.60 yen.
    In other news overnight there was soft US data. The private payrolls processor ADP showed a tepid increase of 139,000 jobs in February, while jobs growth in January was revised down sharply to 127,000 from 175,000. The ISM non-manufacturing PMI fell to a 4-year low last month.

    However the dollar remained buoyant as Fed policy maker Williams said yesterday that he expects the first rate hike to be in mid 2015. This gave a boost to the dollar.

    USDJPY rose to a high above 102.75 in Asia today, up from the session open of 102.30 and up 1.2% since Monday.

    EURUSD traded at $1.3728, little-changed in Asia but off 2-month high of $1.38255 hit on Friday. A key risk for the euro will be today’s European Central Bank meeting. Interest rates are expected to remain the same at 0.25% but many expect the central bank to end its SMP sterilization program, which means an end to bond buying that was draining liquidity. By ending this program, the increase in liquidity in the financial system of the Euro zone will weaken the euro.

    GBPUSD was flat trading a 20-pip range above $1.6706. The Bank of England policy announcement will be in focus today.It is expected to be a non-event as the rate is predicted to remain at 0.50%.

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