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Forex: AUD/USD off 1.0220 lows made by disappointing China PMI

FXstreet.com (Barcelona) - The AUD/USD is being pressured on Tuesday following the disappointing China HSBC flash manufacturing PMI, at 50.5 in March, instead of the 51.5 consensus. The cross fell 50 pips from 1.0270 area to be held above 1.0220 during the Asian session. As of writing, however, the market is retracing losses back to 1.0250 for now and despite the disappointing German flash PMI data in April as Italy and Spain are having its lowest yields for their debt of the last 18 months.

In regard to China manufacturing: “This downside miss gives credence to PBoC Governor Zhou weekend remarks about China is now aiming for "lower, sustainable growth". Consensus and the major institutions such as IMF still expect 8+% GDP growth this year, so there’s more work to do to lower expectations. TD at 7¾%”, wrote TD Securities analyst Annette Beacher.

In Australia, ABS has estimated that 60% of population growth is of net overseas migration. The country’s population is set to reach 23 million later today.

“The AUD/USD has again sold off and will shortly encounter initial support and take profit at 1.0220/04, the 78.6% retracement and the 11th March low”, wrote Commerzbank analyst Karen Jones considering it to be the last defense for the 1.0116 recent low.

S&P outlook on Japan could turn negative

The credit rating agency Standard & Poor's has expressed concern over the recent monetary situation transpiring in Japan, coupled with tangible doubts that the government can finally win the battle against deflation.
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