Aussie Dollar Little Moved After Caixin PMI Release, RBA Ahead
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Aussie Dollar Little Moved After Caixin PMI Release, RBA Ahead

DailyFX.com -

Talking Points

  • Australian Dollar little changed post Caixin PMI report
  • Manufacturing PMI 49.4 in April versus 49.8 expected
  • Small response likely due to pre-positioning for the RBA

Having trouble trading the Australian Dollar ? This may be why .

The Australian Dollar showed a tepid response against its major peers after China's Caixin PMI crossed the wires. The gauge of the manufacturing sector showed a print of 49.4 in April, worse than the 49.8 forecasted by economists and lower than the 49.7 reading in March. A reading below 50.0 shows a contraction while a mark above indicates growth. This marks a 14 th consecutive month in which the manufacturing sector contracted.

Perhaps a minimal reaction from the Aussie could be explained by the upcoming Reserve Bank of Australia monetary policy announcement. Overnight index swaps are pricing in a 55 percent probability that the central bank will cut rates by 25 basis points. Such parameters could deter speculators from taking on large positions ahead of a potentially volatile event .

Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading of -1.12 following the announcement, meaning that for every trader long the AUD/USD, there are 1.12 on the short side. The SSI is a contrarian indicator, implying further AUD/USD strength ahead.

Want to learn more about the DailyFX SSI indicator? Click here to watch a tutorial .

Aussie Dollar Little Moved After Caixin PMI Release, RBA Ahead

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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