AUD/USD Seesaws on China PMI Data as US Jobs Report Looms
DailyFX.com -
Talking Points:
Australian Dollar rallied and then quickly fell after China’s PMI figures
Manufacturing PMI 50.2 in March vs 49.4 expected and 49.0 in February
Price reversal likely due to traders waiting for US jobs data for direction
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The AUD/USD exchange rate rallied and then quickly reversed price-action after China released its official PMI figures for March. The headline manufacturing barometer posted its highest reading since May 2015 with a print of 50.2, better than economists’ forecast of 49.4. The Non-manufacturing gauge crossed the wires at 53.8, compared to the prior of 52.7.
Later, Caixin’s Manufacturing PMI for the world’s second largest economy showed a print of 49.7, better than the expectation of 48.3 and February’s reading of 48. This was the highest mark since February 2015.
The volatile price-action may be due to traders waiting for the main event risk of the week before choosing a directional bias, the US labor statistics. Non-farm payrolls and average hourly earnings will be closely tracked by the financial markets because they are key drivers for FOMC monetary policy speculation, a major theme driving risk appetite and the sentiment-linked Aussie.
In addition, the PMI figures come after Standard & Poor’s downgrade China’s credit rating from “stable” to “negative”.
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