Australian Dollar Surges After Chinese PMI Data Tops Expectations
- China HSBC Manufacturing PMI Came in at 50.8 vs. 50.5 Expected, 50.9 Oct.
- Stable PMI Give China Time to Implement Policy Changes from Third Plenum
- Aussie Dollar Surgedas Firm Chinese Data Weighed on RBA Rate Cut Bets
AUD/USD rose after HSBC reported its Manufacturing PMI gauge came in at 50.8 in November, above 50.5 expected and 50.9 recorded in October. The Aussie surged from 0.9140 to 0.9160, the highest in a week. Similar price action was observed elsewhere as AUD/JPY rose from 93.50 to 93.70 and on the same note EUR/AUD slumped from 1.4878 to 1.4848. The report echoed official PMI figures released over the weekend that saw an increase to 51.4 in November versus 51.1 expected and 51.4 in the prior month.
Stability in manufacturing in the world’s second-largest economy may give Chinese Premier Li Keqiang more room to implement policy changes laid out with the Third Plenum meeting last month. This may also indicate that China’s economic recovery is sustaining momentum amid government efforts to rein in credit growth.
Chinese officials said in October that in order to keep China’s unemployment rate stable the nation needs an annual growth rate of 7.2%. China is Australia’s top export market, so stable economic growth there may help to boost Australian performance and prevent the RBA from restarting interest rate cuts.
From here, the market will shift its focus to the US ISM Manufacturing gauge, as well as Australia’s RBA interest rate decision.
China Manufacturing PMI Data at a Glance
- HSBC Markit Manufacturing PMI: 50.8 in November vs. 50.5 Expected, from 50.9 in October.
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AUD/USD 5-minute Chart: December 2, 2013
-- Written by Cheng Li, DailyFX Research. Feedback can be sent to email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.