Aussie Dollar Rises as China Services PMI Reaches 3-Month High
- Aussie Dollar edged higher as Chinese PMI data beat expectations
- Services and Composite PMIs advanced to highest levels in 3 months
- Firming Chinese activity data may bode well for Australian growth
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The Aussie Dollar edged higher against its US counterpart following better than expectedChinese PMI data. The Caixin PMI Composite index showed a print of 49.9 in October, an increase from the previous figure of 48.0. Services PMI outperformed its prior mark as well. The figure came in at 52.0, up from 50.5 in September. Both numbers represent a three-month high.
Improving Chinese activity metrics could be suggesting that PBOC stimulus efforts are working their way into the economy. China is Australia’s largest trading partner, so a pickup in performance in the former country may translate into positive spillover for the latter country via firmer export demand. This may, in turn, limit scope for further RBA interest rate cuts. Indeed, the currency advanced alongside Australian front-end bond yields after the PMI data crossed the wires.
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