Home Forex Market News Aussie rebounds on unexpectedly better Chinese PMI

Aussie rebounds on unexpectedly better Chinese PMI

Risk appetite was boosted after a preliminary gauge of Chinese manufacturing provided encouraging figures today.

Expectations were for the flash manufacturing purchasing managers index (PMI) to come in much weaker and thus the Australian dollar jumped higher on the unexpected data. In a knee-jerk reaction it bounced to 0.8921, moving off a 7-month low of 0.8851 touched yesterday.

The HSBC and Markit PMI index rose to 50.5 from a reading of 50.2 in August, compared to predictions for it to fall to 50, which is the border between expansion and contraction.

The holiday in Japan today resulted overall in a quiet Asian trading session but the Chinese data provided risk appetite. There were signs of slower growth in China recently so the upbeat data provided some relief to the markets.

The dollar opened in Asia at 108.82 against the yen and eased to 108.59 before jumping to 108.83 when risk appetite improved following the better Chinese PMI data.

The euro bounced off yesterday’s lows of 1.2815 when it fell versus the dollar after dovish comments from ECB chief Mario Draghi. The euro moved higher to 1.2862 after the better-than-expected Chinese PMI.

There will be caution ahead of the Eurozone flash manufacturing PMI later today. A weak number would raise speculation that the ECB has to take more measures to revive the Eurozone economy.

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