News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Breaking news

British Pound sinks as EU Brexit negotiator Barnier says there may not be an EU/UK deal

Australian Dollar Blips Lower As China's Caixin PMI's Underwhelm

Australian Dollar Blips Lower As China's Caixin PMI's Underwhelm

2018-03-05 02:15:00
David Cottle, Analyst
Share:

Talking Points:

  • China’s private sector service firms did a little less well than expected in February
  • However steady growth remains the watchword
  • The Australian Dollar ticked down but market focus is clearly elsewhere

Trade all the major economic data live and interactive at the DailyFX Webinars. Do join me on Wednesday if you can for Australia’s key GDP release.

The Australian Dollar ticked down Monday following the release of Chinese service-sector data which missed forecasts by the merest whisker.

February’s Purchasing Managers Index for the private service sector from media group Caixin came in a 54.2 when expectations had centered on a print of 54.3. February’s reading was also well below January’s 54.7. Along with the Caixin manufacturing survey released last week (modestly above forecasts), the composite index was 53.3, below the previous month’s 53.7.

In the logic of PMI surveys any reading above 50 signifies expansion.

The Caixin versions are released a little after official Chinese PMIs which focus on the larger, state-run concerns. The manufacturing version of that missed forecasts last week but much of that weakness was put down to factory stoppages around the long Lunar New Year break.

Overall the Chinese economy appears to be making decent headway into 2018, with measureable if not stellar growth seen. China set Monday an official growth target of ‘around 6.5%’ for this year, leaving out its usual stated aim of hitting a faster pace if possible. China-watchers believe that its rulers are now as concerned with financial stability as they are with economic expansion.

The target was released ahead of Premier Li Keqiang’s report to the National People’s Congress now under way in Beijing. 2017’s growth of 6.9% fit nicely with that year’s target of ‘6.5% or better’

Still, AUD/USD was lower after the release of those PMI numbers.

Australian Dollar Blips Lower As China's Caixin PMI's Underwhelm

On its broader, daily chart the Australian Dollar remains in a downtrend against its US big brother from the three-year highs printed in January. With the respective monetary policies of the US and Australia now firmly skewed in favor of the former this perhaps should not be a surprise.

Australian Dollar Blips Lower As China's Caixin PMI's Underwhelm

However, there are three heavyweight Australian economic events this week with an interest rate decision from the Reserve Bank of Australia, a speech from the Governor and official GDP data due. AUD/USD could be range bound until both are out of the way. Investors will be keen to see whether the RBA dials up its rhetorical opposition to AUD strength. It was disinclined to do this while the US Dollar was under general pressure but, now that it is rising, it may feel empowered to help it along a little.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES