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1 Sep 2015
AUD/USD steady on better than expected Chinese Manufacturing
FXStreet (Guatemala) - AUD/USD is steady between recent ranges on the back of the second round of Chinese data and the release of the impressive Australian building permits that has come in ahead of the RBA decision later on today.
At the start of the hour, the official NBS Manufacturing PMI for August was expected at 49.7% vs 50% in July and arrived at inline with expectations, but remains disappointing while below the key 50 level. The Non-Manufacturing PMI for the same period came in at 53.4 vs 53.9 previous. The price action was mixed within a narrow range of between 0.7104 and 0.7132.
However, the final Caixin August Manufacturing PMI that was expected at 47.1 flash reading came in at 47.3 and below the key 50 level with little market reaction to the release. China services PMI arrived below expectations of 53.9 at 51.5 vs 53.8 pre.
The rest of the week is equally eventful with Aussie GDP for Q2 tomorrow and the Nonfarm Payrolls showdown from the US economy. This has been tipped to print with positive momentum in the labour market and following suit of the upbeat data from the economy of late, underpinning expectations of a possible hike from the Fed on the 17th of this month.
AUD/USD and the RBA meeting
We now await the RBA decision and statement. Due to the current market turmoil, the question is whether the RBA anticipate headwinds and whether they wish to protect against adverse repercussions of a Chinese slowdown and subsequent negative implications for the Australian economy. However, most economists feel that the RBA can stay on hold due to a further weakening of the Aussie since the last meeting of 2.9% and relatively stable iron ore prices along with a better-than-expected jobs report.
AUD/USD risks bearish below 0.7293
While trading below the 3-month resistance line at 0.7293, the risks are still to the downside of which the RBA's will be taking in to consideration upon their interest rate decision tonight.
Rallies may also find tough resistance on the 0.72 handle and ahead of R2 and R3 (0.7250/0.7301). Overall, AUD/USD would need to get back above 0.7448 and July 21 high, and through the 50 DMA at 0.7393 to alleviate negative pressures.
At the start of the hour, the official NBS Manufacturing PMI for August was expected at 49.7% vs 50% in July and arrived at inline with expectations, but remains disappointing while below the key 50 level. The Non-Manufacturing PMI for the same period came in at 53.4 vs 53.9 previous. The price action was mixed within a narrow range of between 0.7104 and 0.7132.
However, the final Caixin August Manufacturing PMI that was expected at 47.1 flash reading came in at 47.3 and below the key 50 level with little market reaction to the release. China services PMI arrived below expectations of 53.9 at 51.5 vs 53.8 pre.
The rest of the week is equally eventful with Aussie GDP for Q2 tomorrow and the Nonfarm Payrolls showdown from the US economy. This has been tipped to print with positive momentum in the labour market and following suit of the upbeat data from the economy of late, underpinning expectations of a possible hike from the Fed on the 17th of this month.
AUD/USD and the RBA meeting
We now await the RBA decision and statement. Due to the current market turmoil, the question is whether the RBA anticipate headwinds and whether they wish to protect against adverse repercussions of a Chinese slowdown and subsequent negative implications for the Australian economy. However, most economists feel that the RBA can stay on hold due to a further weakening of the Aussie since the last meeting of 2.9% and relatively stable iron ore prices along with a better-than-expected jobs report.
AUD/USD risks bearish below 0.7293
While trading below the 3-month resistance line at 0.7293, the risks are still to the downside of which the RBA's will be taking in to consideration upon their interest rate decision tonight.
Rallies may also find tough resistance on the 0.72 handle and ahead of R2 and R3 (0.7250/0.7301). Overall, AUD/USD would need to get back above 0.7448 and July 21 high, and through the 50 DMA at 0.7393 to alleviate negative pressures.