Aussie Dollar Looks Past Chinese PMI as NFP, RBA Loom Ahead
- Australian Dollar unimpressed by unexpectedly strong Chinese PMI data
- Caixin Manufacturing PMI indexrose to 51.6 in August vs. 51.0 expected
- Data points to third consecutive month of expansion in the factory sector
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Australian Dollar price action was uninterrupted by the release of better than expected Caixin Chinese PMI figures. The survey showed that the manufacturing sector saw its strongest pace of expansion since February, with the headline index rising to 51.6 in August.
In the logic of PMI statistics, a reading above 50 indicates that activity in the relevant sector (in this case, manufacturing) is expanding, whereas a print below that means it is shrinking. The distance above or below 50 points to the pace of either growth or contraction.
The markets may have been too preoccupied with upcoming US jobs data or next week’s RBA rate decision to pay heed to Chinese PMI data. It may also be that policymakers’ worries about Aussie strength have broken the link between upbeat data and rate hike bets. Indeed, the release was unnoticed by local bond yields.
In fact, local manufacturing PMI statistics have not proven to be any more market-moving. An impressively strong data set from AIG released earlier in the session also fell on deaf ears. This time around, AUD/USD was already on the way higher when the data hit the wires and continued along that path thereafter.
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