Aussie weaker despite upbeat Australian data; China data weighs

Aussie weaker despite upbeat Australian data; China data weighs

3 August 2015, 08:15
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On Monday the Australian dollar was weaker in Asia trade despite a positive manufacturing survey as the outlook for inflation appeared quiet.

Meanwhile, market players noted a disappointing manufacturing survey from China. The Australian economy is highly dependent on exports to China.

AUD/USD traded at 0.7297, down 0.16%, while USD/JPY changed hands at 124.05, up 0.17%.

EUR/USD was last at 1.0972, down 0.10%.

In Australia, the AIG manufacturing survey jumped 6.2 points to 50.4 in July, posting the first expansion since May 2014.

AI Group Chief Executive Innes Willox said that the weaker dollar was a significant positive factor in the July turnaround in manufacturing performance which saw another rise in exports.

Healthy contributions from the food and beverages sector and industry segments linked to residential construction offset continued weakness in other areas including the important machinery and equipment sector," he said.

Meanwhile, the MI inflation index climbed 0.2% month-on-month in June, well within the central bank's 1% to 3% band.

"Cautious optimism from the RBA governor in recent weeks speaks to us that the RBA board is likely to leave the cash rate at 2% for quite some time," MI said.

In China, manufacturing activity dropped unexpectedly in July.

According to China Logistics Information Center, Chinese Manufacturing PMI fell to 50.0, from 50.2 in the preceding month. Analysts had expected Chinese Manufacturing PMI to remain unchanged at 50.2 last month.

Fresh data spurs concerns over the strength of the world's second largest economy.

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