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Aussie, Kiwi Gain as China Manufacturing Index at 16-Month High



Good day forex traders and readers.

It is the first day of the trading week and we are off to an exciting start. The AUD/USD has dropped it’s bearish weight from last week and is now green for the week. It’s largest trading partner China, reported a 16 month high for manufacturing. I always mentioned that China economic progression is crucial to the Australian dollar and indeed we can see it clearly in this instance. You can read the Bloomberg report below.

The Australian and New Zealand dollars rallied from losses last week after Chinese government data showed manufacturing reached a 16-month high, bolstering the outlook for exports from both South Pacific nations.

The Aussie is set for its biggest advance since May versus the yen after Australian building approvals rose more than twice as fast as economists forecast. Gains were limited before the Reserve Bank meets tomorrow amid speculation policy makers will reiterate a willingness to cut interest rates already at a record low. New Zealand’s dollar was set for the biggest climb in five weeks as data showed the nation’s terms of trade rose.

“The Aussie dollar began the session on the front foot given the China manufacturing data and we saw another leg up after building approvals came in well above expectations,” said Jim Vrondas, the Sydney-based chief currency and payment strategist at OzForex Ltd. “It will struggle above 90 cents.”

Australia ’s dollar rose 0.9 percent to 89.83 U.S. cents as of 5:28 p.m. in Sydney after touching 88.93 on Aug. 30, matching the least since Aug. 5. It gained 1.8 percent to 88.97 yen. The kiwi climbed 1.1 percent to 78.09 U.S. cents, poised for the biggest gain since July 25, and jumped 2 percent to 77.36 yen, set for the largest advance since April 8.

China’s Purchasing Managers ’ Index was at 51.0 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. HSBC Holdings Plc and Markit Economics said today a final reading of their PMI for China was 50.1, with readings above 50 indicating expansion. China is the biggest export destination for Australia and New Zealand.

The Aussie rose for the first time in six days as a statistics bureau report showed home building permits surged […]

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