Created Using Marketscope 2.0
THE TAKEAWAY: The Australian Dollar rallied against its American counterpart, the U.S. Dollar as the HSBC Flash Manufacturing PMI beat analysts’ estimates of 50.8 and came in at 51.7.
Expectations had China’s HSBC Flash Manufacturing PMI at 50.8 ahead of the announcement as the Australian Dollar remained quiet. The eventual print of 51.7 sent the Australian dollar on a rally from 1.0374 before the release to 1.0385 just minutes after. A PMI reading of greater than 50 indicates that the relevant industry is in expansion.
After some relatively unimpressive factory output and retail sales numbers coming out of China, investors were concerned that a Chinese growth rebound was losing momentum, however the PMI value of 51.7 may reignite some confidence.
The Australian Dollar has seen a rally in early March as traders pared rate cuts bets on announcements made by the RBA that cuts in 2011 still have room to run. The so called “Aussie” rallied further on the Manufacturing PMI news as expansion for Australia’s largest trading partner is seen good news for the commodities based economy.