In spite of a slight decline in Chinese PMI the ‘Aussie’ was still able to gain on its peers as investors speculate on the outcome of the RBA’s next rate announcement. The New Zealand Dollar also advanced.
The Australian Dollar exchange rate was trading in the region of 1.0238 against the US Dollar as of 09:38 am GMT
According to figures released by the National Bureau of Statistics and China Federation of Logistics and Purchasing, China’s manufacturing PMI declined in January, sliding from 50.4 in January to 50.1 in February and a five month low.
Economists had forecast a slight increase to 50.5.
As industry expert Xie Dongming commented: ‘The recovery is obviously weak. The official PMI is almost at the line between expansion and contraction and seasonal factors from the Chinese New Year holidays alone can’t explain this.’
As China is Australia’s largest trading partner, signs of a slowdown in the Asian nation’s manufacturing sector could have significant adverse affects for commodity-driven Oz.
Consequently, immediately after this news was released the ‘Aussie’ declined against several of its most traded peers.
However, it was later able to reverse these declines, advancing for a third day on the Yen and gaining modestly on the US Dollar, as investors pare the odds of the Australian central bank cutting rates. The Reserve Bank of Australia will announce its rate decision next Tuesday.
As currency strategist Andrew Salter states: ‘The RBNZ is in wait-and see mode. We’re coming to the bottom of the range in the Aussie. We see value at current levels.’
Salter went on to forecast that the Australian Dollar would be trading in the region of $1.05 against its US counterpart by the end of this year.
In other South Pacific news, the New Zealand Dollar also strengthened against the US Dollar and Japanese Yen as gains in Asian stocks counteracted the effect of disappointing New Zealand data. A government report revealed that the nation’s terms of trade fell by 1.3 per cent in the last quarter of 2012, despite economists expecting a gain of 1.2 per cent.
Current AUD Exchange Rates
The Australian Dollar to Euro exchange rate is trading at 0.7836
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trading at 1.0238
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trading at 0.6741
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is trading at 1.2387
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is trading at 1.0541
The Australian Dollar to Japanese Yen (AUD/JPY) exchange rate is trading at 94.8244
These exchange rates were correct as of 09:38 am GMT
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