Promising End to the Week for the Australian Dollar, Despite Weak Manufacturing Data

Australian Dollar Forecast: AUDGBP gains by 10% since April

The Australian dollar has capped off its first trading week in the New Year in a good position. Yesterday saw the release of the anticipated manufacturing PMIs for December. The figures were disappointing however and saw the AUD slump slightly. But the AUD did find further support from the US-China trade deal which has now received an official signing date from the US President.

Australian Manufacturing PMIs Disappoint

The December manufacturing figures for Australia were released on Thursday. The results showed a disappointing return as the index slipped further into a state of contraction which limited the gains seen from the AUD. The Aussie economy was not the only one to fall short of positive manufacturing data however as the UK and China also saw their manufacturing sectors take a dip. The poor Aussie data saw the AUD fall in strength as investors were concerned about the sector’s ability to recover going forward. The overall downward trend did prove somewhat positive for the AUD however as the GBP slumped from its own poor UK data, allowing the GBP/AUD rate to shift in favour of the AUD.

US-China Trade Deal Receives Official Signing Date

The AUD found support from the updates surrounding the US-China trade deal. US President Donald Trump stated that an official date had been set for the two countries to meet and sign the ‘phase one’ deal. News of this signing sent the AUD rising as confidence that the global economy was likely to gain also.

AUD Exchange Rate Could be Vulnerable to Lack of Market Risk Appetite

Economists have noted that the Australian dollar may fall victim to a lack of market risk appetite. The next important data release will be that of the December Australian services PMI to which analysts have pinned a decline to the upcoming result. Should this be the case, the AUD will most likely lose confidence from investors. But the AUD could strengthen should the Federal Open Market Committee (FOMC) cut their rates once more or show dovishness in their upcoming meeting’s minutes.

If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you.teh@currencies.co.uk