The big overnight news on the Australian dollar was new home sales falling for December dropping 4.4%. A strong property market has helped fuel Australia’s solid growth numbers and this worrying sign caused an early morning sell off, compounding yesterday’s sell off over fears at Greek debt talks stalling.
This was cooled later by better than expected Chinese PMI (Purchasing Managers Index) data showing an above 50 reading indicating growth in Chinese manufacturing for January. Contrary to the wider expectations China is slowing down, I feel China will continue to fare well this year, particularly as US demand appears to be picking up. Other Chinese data out showed domestic demand and net exports falling but this is probably reflecting the overall international situation. I don’t feel it is a sign of a serious problem or the start of a ‘demise’ in Chinese economic strength. It is the year of the dragon after all!
UK PMI for Manufacturing showed an improvement which gave the pound a boost but GBPAUD has been pretty range bound today between 1.4752 and 1.4880. PMI incidentally is Purchasing Managers Index, it is a snapshot of Purchasing Managers attitudes to their business and provides one of the most up to date sources of information on how that particular area of an economy is faring. Watched closely by investors it often has the propensity to move the market one way or the other.
Tomorrow at 09.30am GMT we have UK Construction PMI, Australia Trade Balance figures and Friday US Non – Farm Payroll data and probably most importantly the outcome of the Greek debt talks. As discussed in yesterday’s post the Aussie will suffer and benefit as investor’s attitude to risk change. The Greek debt talks are a major hurdle that needs to be cleared before investors have faith to move funds. The Aussie is I feel becoming more and more of safe haven in these uncertain times as it has gone from strength to strength and offers a good return to investors.
If you have are buying or selling Aussie dollars I can help make you aware of all the issues surrounding your trade as well as help with the very best rates in the process. I think the Aussie is going to remain strong so anyone looking to buy the Australian dollar needs all the help they can get! If you would like to find out more information about our highly personal service I will be more than happy to have a chat and explain your options. Just send a mail to [email protected] detailing what you need to do!