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
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/sqeRL7Rf7u
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/ukOW0dWJxf
  • Beautifully put. https://t.co/0fBsmUH6Pb
  • Gold prices could claw back lost ground ahead of the non-farm payrolls report for November, buoyed by a dovish FOMC, falling real yields and rising inflation expectations. Get your $XAUUSD market update from @DanielGMoss here:https://t.co/3mqut0yQIQ https://t.co/nfyycibwKM
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/UWnLJHVPN4
  • Rather than focusing on earning a specific number of pips per day, traders need to focus on what can be controlled. In trading terms this relates to following a strategy perfectly, with no emotion or hesitation. Learn more here: https://t.co/6ZH026QLRN https://t.co/JJIyKh8r1l
  • That if you’re offended by what someone says on Twitter and that ruins your day, you live an extremely lucky life to be able to have that be your biggest problem for the day. https://t.co/H9KQjR3ViK
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/tl54v6sKkX
  • Moving averages are extremely popular due to its easy-to-use nature and multitude of uses when trading. What are some popular moving averages and how can you use them? Find out: https://t.co/ik0wQ3MLGE https://t.co/heAYoTMDeR
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here:https://t.co/ZNs4Qi8ieG https://t.co/UqZBBPZiOl
Australian Dollar Backtracks as China Caixin PMI Prints 5-Month Low

Australian Dollar Backtracks as China Caixin PMI Prints 5-Month Low

2020-02-03 01:45:00
David Cottle, Analyst
Share:

Australian Dollar, China Caixin Manufacturing Purchasing Managers Index Talking Points:

  • The PMI came in at 51.1, above the 51.0 expected
  • Manufacturing activity clearly remains mired however
  • The Australian Dollar market is in any case focused on its home central bank

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We’d love to have you along.

The Australian Dollar slipped a little on Monday as a key measure of Chinese manufacturing output beat expectations but dropped to a five-month low nevertheless.

January’s Purchasing Managers Index from media group Caixn came in at 51.1, just a hair above the 51.0 print expected but below December’s 51.5. In the logic of PMI numbers any print above 50 signifies expansion for the sector, so this series remains in the green from that angle. However, this was also the lowest reading since August 2019.

Caixin’s indicator tracks China’s smaller, privately-held firms’ performance and acts as a compliment to the official PMI series released earlier. There large, state-linked companies dominate. It came in at exactly 50 for January and, with the Caixin data, add to the perception that Chinese growth remains tepid at best as the economy heads into 2020, with the coronavirus outbreak likely to act as a considerable break on growth ahead, even if its consequences do fall short of some more dire predictions.

The Australian Dollar can act as the markets’ favourite liquid China proxy thanks to Australia’s export links to the world’s second-largest economy. It did so to some extent on Monday, retreating a little after the numbers. Chinese stock markets plunged early, in a delayed reaction to the outbreak which came as that country celebrated its extended new year break.

Australian Dollar Vs US Dollar, 5-Minute Chart.

The Aussoe has already come under broad pressure as the viral outbreak magnified a general retreat from growth sensitive assets as 2020 got under way. Such risk correlated assets may now be stabilizing a little after very sharp falls, but they will remain vulnerable to virus news headlines.

Australian Dollar Vs US Dollar, Daily Chart

The market is also looking to the Reserve Bank of Australia’s first monetary policy decision of the year. That’s coming up on Tuesday with the chances of any reduction in the record low 0.75% Official Cash Rate judged to have receded quite markedly in the face of quite upbeat employment and inflation headlines.

AUD/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -20% -4% -9%
Weekly 1% 8% 6%
What does it mean for price action?
Get My Guide

In fact, there were unsettling details behind both encouraging headlines, with part-time job creation utterly dominant and underlying pricing power utterly absent. Even so, the markets believe that the Australian economy has done enough to put off lower interest rates until at least April, according to a survey from Reuters.

Australian Dollar 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!

https://www.dailyfx.com/free_guide-tg.html?ref-author=Cottle.

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

DISCLOSURES