Forex Marketz Daily Forex News – Fully Markets Update
This morning, the Chinese purchasing managers’ index (PMI) data was released. This gave the Australian dollar a bit of a boost, as the PMI was better than expected.
The official Chinese purchasing managers’ index, for November, came in at 51.8. That was above the 51.4 print expected and October’s print of 51.6. This a strong reading compared to what we have seen over the past twelve months as well. It was only beaten by September’s print of 52.4. Any PMI score above 50 indicates expansion for the sector being measured.
The Chinese non-manufacturing PMI data came in at 54.8. This was above October’s print of 54.3. These official surveys cover large businesses, which often have heavy state investments and or control. Smaller, private firms are included by the private Caixin PMI releases. November’s release of the Caixin PMIs will be released this week into early next week.
The Australian Dollar Reacts to Chinese Data
The official purchasing managers’ index survey from the world’s second largest economy tells a story that their economy heading into yea end appears to be in pretty good shape. The Australian Dollar often act as a liquid proxy for China in the Forex markets. Today, investors seem to have reacted favorably towards today’s data. The benchmark AUD/USD Forex market rose sharply after their release.
However the Australian dollar remains caught in a long downtrend from 2017’s peak. Another test of those highs was just rejected.
Fundamentally the AUD is suffering on. For one ting, the expected December U.S. Federal Reserve interest rate increase will see the Australian dollar’s long held rate advantage over the American Dollar finally come to an end. There are more Federal Reserve Board rate hikes expected even as the Reserve Bank of Australia is expected not to change their monetary policy or official cash rate anytime soon. At least for all of 2018. The prospect of a higher yielding U.S. currency will is going to diminish the AUD’s international attraction among Forex traders.
