FX News – December 2: Aussie, Sterling Start Out Strong

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The aussie received a major lift from news in Australia and China to start off December on a positive note.

Australia's Building Permits for October were up by 23.1% over the past 12 months. However, it shrank by 1.8% compared to last month, although it was still seen positively since the original expectation was a contraction by 5.0%. In addition, Company Gross Operating Profits for Q3 was up by 3.9% compared to Q2, which was better than the 1.0% expectation.

Positive news also came from China with its HSBC Manufacturing PMI for November, which came out at 50.8, which was better than the expected 50.5. Although 50.8 was lower than the previous month's 50.9, it is still the second-highest Manufacturing PMI for the country in the past eight months.

These news helped lift the AUD/USD pair up from the dismal performance it has seen over the past two weeks. From dropping to as low as 0.9055 on Friday last week, the pair is back to the 0.9150 area.

Tomorrow (3:30AM GMT), the Reserve Bank of Australia will release its last interest rate decision for the year wherein it is expected to keep rates at 2.5%. As usual, this is expected to cause volatility in the AUD/USD pair. The next announcement will be in February 2014.

The pair is currently trading at 0.9165, with initial resistance seen at 0.9126, followed by 0.9149. Meanwhile, initial support is at 0.9040, followed by 0.9017.

The GBP/USD pair also displayed a fantastic performance during today's Asian session, as it continued the bull run that began in November. The pair now broke past last week's high of 1.6383, and is now trading at 1.6415.

Later this week, the Bank of England will also release its interest rate decision (December 5, 12:00PM GMT), wherein it is expected to maintain rates at 0.5%.

Initial resistance for the pair is at 1.6412, followed by 1.6453. Meanwhile, initial support is seen at 1.6341, followed by 1.6300.

By FX Strategy Team, Published on 2nd of December 2013
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