Investing.com - The U.S. dollar weakened against its Australian
counterpart during Friday's Asian trading session after data out of
Australia indicated that inflation might be weaker than expected.
The AUD/USD shed 0.18% to trade at 1.0408, down from a session high
of 1.0446, and up from a session low of 1.0396. Support was likely
to be found at 1.0391, the low from Thursday, while resistance
could be found at 1.0476, Tuesday's high.
Australia's producer price index came in on Friday at 0.2% --
economists had forecast a gain of 0.4%. The PPI is known as a sign
of future inflation, as it signals the price changes businesses are
paying for manufactured goods. Over time, businesses should pass
these price hikes onto consumers, raising the consumer price index
-- the general sign of inflation.
Also on Friday, China's official manufacturing PMI printed below
expectations at 50.40; the consensus estimate was for 50.90.
Australia's economy remains heavily dependent on its mineral
exports, many of which are shipped to China.
With inflation likely to be subdued, and China's economic recovery
limited, the Australian dollar was free to rally, especially
against the greenback, which was broadly weaker. The U.S. dollar
index shed 0.09% to trade at 79.17 Friday.
Earlier on Thursday, economic data released in the U.S. was mixed.
The Chicago PMI came in better than expected at 55.6 (economists
had forecast 50.5), signalling economic expansion in the Midwestern
region of the U.S., but jobless claims came in worse than expected.
Initial jobless claims printed at 368,000, more than the 350,000
With the job market in the U.S. continuing to be sluggish, it seems
likely that the Federal Reserve will have to keep up its
expansionary monetary policy for some time. The Federal Reserve has
promised to keep interest rates near 0 until the unemployment rate
in the U.S. drops to 6.5%.
Looking ahead, the U.S. nonfarm payroll report will released early
Friday. That will paint a more clear picture of the jobs market.
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