Australian Dollar Gains Short-Lived Following Strong Chinese PMI Data
THE TAKEAWAY: Chinese Non-Manufacturing PMI Rose to 58.0 in March > Fears of Global Growth Slowdown Subdued, Leading Traders to Adjust Portfolios > AUDUSD Rose Briefly, but Quickly Lost Gains
Data published by the China Federation of Logistics and Purchasing shows that the country’s non-manufacturing purchasing managers index rose to 58.0 in March from 48.8 in February. The positive figure contrasted a series of indicators over the past few months that suggested a drop off in Chinese growth.
A growing Chinese economy is a boon to local nations that rely on the country for trade. As fears of a global slowdown of economic growth were subdued, traders bought currencies native to exporting countries reliant on Chinese consumption, like the Aussie.
The Australian dollar follows positive Chinese PMI since a strong Aussie export sector would suggest that the likelihood of a central bank rate cut is less likely. The AUDUSD rose as high as 1.04464.
Overall, price action on the Aussie was minimal as traders focus on the RBA cash rate decision due out later this morning.
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