Strong China PMI complicates Australian dollar picture
Australian dollar sellers were feeling good earlier this week. Iron ore prices were plunging, the RBA was warning of an investment slowdown and China’s economy wasn’t showing any particular strength.
Now the final part of that equation is under threat. AUD/USD jumped to 0.9274 from 0.9220 on the HSBC China manufacturing PMI. It jumped to 49.7, much better than 48.1 expected.
The Australian dollar later gave back most of the gains in a sign of the cloud that’s hung over the currency this week but a look at the short-term chart shows a series of higher lows and the base is building ahead of 0.9200, which has been a springboard for gains since the start of April.
AUD/USD 10 minute chart
I think there are going to be some great AUD trading opportunities in the days ahead. The Australian calendar is light until June so the broader risk trade and US dollar trade will dominate.