FX News - Mar 3 2014: Chinese HSBC Manufacturing PMI Drags Down AUD/USD

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Mixed data from China today dragged down the aussie at the opening of the Asian trading. Although the country’s Non-manufacturing PMI came out higher at 55.0 than the previous 53.4, the market tended to focus more on the HSBC Manufacturing PMI which came out at 48.5 as expected, but lower than the previous 49.5. The Chinese report was somehow balanced out by the ANZ Job Advertisements, which grew by 5.1%, from the previous 0.0%.

The market reacted negatively to the report from China, as the AUD/USD pair dropped to a low of 0.8890 after opening the Asian session at 0.8900. However, the reaction was short-lived as the pair began a recovery, which lifted it to its current level at 0.8920. Initial resistance to the pair is at 0.8958, followed by 0.8980. Meanwhile, initial support is at 0.8882, followed by 0.8859.

This isn’t the busiest day yet for the AUD/USD pair this week, though. Tomorrow the Reserve Bank of Australia (RBA) will announce its monetary policy decision, so expect a lot of volatility around that time. On Thursday, Australia will also release its Q4 Gross Domestic Product (GDP) figures, which are expected to be higher than the previous quarter. Later in the week, the US will also release its Nonfarm Payrolls (NFP) data, which is always expected to introduce more volatility in the market.

Outside of these events, the brewing unrest in Ukraine is also creating jitters in the market. After former Prime Minister Viktor Yanukovich has been ousted last week, Russia went in to seize Crimea, a Ukranian peninsula. According to Russian President Vladimir Putin, the move is meant to protect Russia’s interests in Ukraine. Current Ukraine PM took this as a declaration of war on his country. Other Western powers are obviously wary of this military action, so expect the market to follow suit.

By FX Strategy Team, Published on 3rd of March 2014
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