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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
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
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • The $AUD may suffer as relations between Australia and China deteriorate amid dwindling growth prospects. Euro traders will be closely watching progress in talks about a €500b recovery fund proposal. Get your market update from @ZabelinDimitri here:https://t.co/LkEFJViPWY https://t.co/6QH27c5ZHS
  • RBNZ's Orr: Expects credit demand to lift and bank lending to match greater credit demand -BBG
  • RBNZ Governor Adrian Orr: Sees more room for banks to increase lending, banks have done well with loan restructures -BBG $NZDUSD #RBNZ
  • Join @ddubrovskyFX 's #webinar at 8:00 PM ET/12:00 AM GMT to find out what information you can gain from knowing what other traders are buying or selling. Register here: https://t.co/Bb3CTCTm44 https://t.co/AyCMqK52oa
  • BoC's Poloz: Negative rates needed only in extreme conditions, extreme conditions may happen if fiscal policy not used -BBG $USDCAD
  • S&P500: Still, risks to the rally remain so traders will have to discern whether this is an honest breakout or a mere head-fake higher. Get your #equities market update from @PeterHanksFX here:https://t.co/zDlsun6VIF https://t.co/IQ1ITcVj7I
  • Very interesting to see the 'pro-risk' Australian Dollar diverge with the #SP500 during Tuesday's Wall Street session. #USD struggled to capitalize on its 'safe-haven' appeal as stocks retreated. Gentle reminder that asset relationships and traits are not always absolute $AUDUSD https://t.co/bs8uXo6q6S
  • $EURUSD Daily Pivot Points: S3: 1.0809 S2: 1.0858 S1: 1.0881 R1: 1.093 R2: 1.0957 R3: 1.1007 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • The Hang Seng suffered its worst day since 2015 on Friday on China anti-sedition proposal. Get your market update from @FxWestwater here:https://t.co/CMQ1UTewiF https://t.co/FSeumhbZn3
  • Trump says he will announce action on China before the week is over - BBG
Australian Dollar Down As China's Manufactruing PMI Stumbles

Australian Dollar Down As China's Manufactruing PMI Stumbles

2018-12-31 01:20:00
David Cottle, Analyst
Share:

Australian Dollar, China Manufacturing PMI Talking Points:

  • The Australian Dollar slid a little on news that China’s manufacturing sector contracted in December
  • The official Purchasing Managers Index came in below 50 for the first time since the middle of 2016
  • Trade détente with the US is becoming pressing for the Chinese economy

First-quarter technical and fundamental forecasts from the DailyFX analysts are out now. What will the New Year bring?

The Australian Dollar slipped a little Monday as China’s manufacturing sector registered a shock contraction.

The official Purchasing Managers Index slipped to 49.4 in December, from 50.0 the month before. In the logic of PMIs any reading below 50 signifies a contraction for the sector in question. The latest numbers mark the first sub-50 print since mid-2016. These numbers will underscore the prognosis that China’s economy has slowed markedly into year-end. They also reveal how ill Beijing can afford a protracted trade dispute with Washington.

Admittedly the Chinese service sector did better, registering a PMI of 53.8. That was well above the 53.2 expected. The composite level was 52.6, just below November’s 52.8.

Still, that manufacturing miss will weigh on risk appetite.

The Australian Dollar can act as the foreign exchange markets’ favorite liquid Chine-economy bet thanks to Australia’s vast raw material exports to the world’s second-largest national economy. It seems to have done so in response to the data although falls were not large.

New Year Slip. Australian Dollar Vs US Dollar, 5-Minute Chart

Volume is likely to have been severely constrained by the year-end break and investors’ true feelings about this number may not find expression for a couple of days.

Downtrend Back In Play. Australian Dollar Vs US Dollar, Daily Chart

On its broader, daily chart, AUD/USD remains under the duress which has ruled for much of this year. The market may well be rethinking the likely path of US interest rates- and it’s been their rise which has damaged the Aussie so egregiously in the past twelve months.

However, Australian rate-futures contracts now price modest cuts in the record-low 1.50% Official Cash Rate over the coming eighteen months This is despite the Reserve Bank of Australia’s oft-expressed opinion that the next move, when it comes, will be a rise. Markets clearly don’t concur and that could be a big problem for Aussie Dollar bulls as 2019 gets under way.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- 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

News & Analysis at your fingertips.