FX News - June 23, 2014: AUD/USD Jumps to 0.9440 on Positive Chinese PMI

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China’s HSBC Manufacturing PMI in June came out better than expected, which helped boost the AUD/USD early in today’s trading. The figure came out at 50.8, where 49.7 was expected, and was previously at 49.4. The rise was a 7-month high for the Chinese economy.

According to Hongbin Qu, HSBC’s Chief Economist in China and Co-Head of its Asian Economic Research: “The improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory. Inventory reduction quickened, and the employment sub-index also showed signs of stabilization.”

Qu also said that this month’s improvement is a sign that the Chinese government’s mini-stimulus is finally taking effect in the real economy. They also expect that the infrastructure investments and related sectors will “continue to support the recovery.” Then finally, he added that they expect that the policy makers will, “continue their current path of accommodative policy stance until the recovery is sustained.”

Traders of the AUD/USD saw this report as good news, which gave a sharp rise to the pair early in today’s Asian session. After opening at 0.9384, it went up and peaked at 0.9443, a level not seen from the pair since the early part of April this year. There are currently signs of a correction, as the pair is trading at 0.9435 at the moment. Initial resistance for the pair is at 0.9403, followed by 0.9426. Meanwhile, initial support is at 0.9363, followed by 0.9340.

After making a huge jump during Friday’s European session, the USD/JPY pair opened today’s session on a very quiet note at 102.09. Since then, the pair has dropped in value quite sharply, and is showing no signs of stopping. It is currently trading at 101.97, with initial resistance seen at 102.34, followed by 102.60. Meanwhile, initial support is at 101.94, followed by 101.68.

By FX Strategy Team, Published on 23rd of June 2014
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