AUD/USD Still Gaining as Chinese Business Mood Picks Up
- Chinese business sentiment picked up a little in November, according to MNI
- October’s print had been a five-month low for the series
- However, the latest survey data look cautiously optimistic
The Australian Dollar is arguably the foreign exchange market’s favorite liquid China proxy and it was steady on Wednesday after news of a modest pickup in business sentiment.
The indicator from US-based consultancy MNI came in at 53.1 for November. That made it modestly higher than October’s 52.2 print, but that had marked a five-month low.
Weakness in this survey has long been led by lower confidence among manufacturing companies, and it remains to be seen to what extent the current stronger-US-Dollar environment will offer succor to China’s exporters.
However, MNI said that new orders and output were both higher on the month, with a weaker Yuan underpinning sentiment. It also said that business conditions were likely to hold up, noting that the survey’s production sub-index rose to a thirteen-month peak of 58.0.
Companies also said they expected increased activity levels to endure over the next three months.
The MNI survey has been in existence since 2007 and provides market-watchers with a relatively early look at sentiment levels.
The AUD/USD pair was unmoved by the data release. The bulls seem to retain the upper hand, which they wrested back after a weak start to the week as the so-called “Trump trade” went into reverse. The Aussie also shrugged off a bleak set of Australian construction data earlier in the session.
AUD/USD was at 0.74236 after the data, from 0.74220 just before it.
Still climbing: AUD/USD through the Asia morning
Chart compiled using TradingView
--- Written by David Cottle, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.