Australian Dollar Ticks Down Despite Rising Mfg PMI
- Australian manufacturers had a pretty good June according to data released Monday
- However, employment in the sector went into mild contraction
- The Australian Dollar slipped a little, but market focus is probably elsewhere
The Australian Dollar didn't move far on Monday despite news of a strong performance from its homeland';s manufacturing sector
The Performance of Manufacturing (PoM) Index from the Australian Industry Group rose to 55 in June from 54.8 in May. This was the ninth straight month of expansion with five of the seven sub-index which contribute to the overall headline figure rising.
However, the employment index moved into mild expansion which might explain the Aussie's underwheling response.
The PoM is identical to the monthly Purchasing Managers Indexes released in most economies, in that any reading above 50 signifies expansion for the sector in question.
The Reserve Bank of Australia is universally expected to leave its key Official Cash Rate at the record-low level of 1.50% when it meets on Tuesday. However other developed-market central banks have struck a more "hawkish" tone recently, reminding the world that ultra-low interest rates and/or other accommodative policy measures cannot linger indefinitely. There has been some expectation that the RBA might follow suit. However, it struck a resolutely neutral policy tone last month and it is at least arguable that not enough has changed for the Australian economy to yet justify a change.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.