The Australian and New Zealand Dollars weakened against the majority of their most traded peers on Thursday after a report out of Australia’s biggest trading partner showed that manufacturing in the world’s second largest economy fell-more-than-expected on Thursday.
According to Markit/HSBC its Purchasing Managers Index (PMI) tumbled to a seven-month low of 48.3 in February and was down from January’s figure of 49.5. It also showed that employment fell at its fastest pace in five years. Any figure below 50 indicates a contraction.
“It’s as you would expect, in recent weeks there’s been increasing concerns about growth in China and the market was hoping for better, so this is a disappointment. In that sort of environment the Australian Dollar gets hurt, and the ‘Kiwi’ has suffered from contagion too,” said Bank of New Zealand strategist Kimberly Martin.
As a result of the disappointing data the New Zealand Dollar fell to a two-week low against its US relation.
Also weighing upon the South Pacific currencies was the news out of the United States which showed that the Federal Reserve planed to continue with the tapering to its monetary easing programme. The Fed said that the turmoil being seen in emerging markets would not cause them to pause reductions.
The Euro softened slightly against the ‘Aussie’ early in the session due to the release of mixed data from the Eurozone. Unemployment in the Netherlands ticked higher and inflation came in lower than forecast in France. Those reports however were countered by improved PMI reports out of Germany and the wider Eurozone.
The Pound was firmer but is expected to see little movement as investors await the release of Friday’s retail sales data.
Current Exchange Australian & New Zealand Dollar Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8973 ,
Australian Dollar,, Pound Sterling,0.5389 ,
Australian Dollar,,Euro,0.6546 ,
New Zealand Dollar,,US Dollar,0.8288 ,
New Zealand Dollar,,Pound Sterling,0.4974 ,
New Zealand Dollar,,Euro,0.6051 ,
[/table]
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