Australian dollar registered largest monthly drop in May since 2011, but today after the release of China manufacturing data, Aussie managed to recover positions. Official reports said that Chinese manufacturing sector accelerated, postponing concerns that slow down in Chinese economy would restrain demand for commodities.
Australian dollar recorded gains against most of its major peers, after experts suggested that the currencys dip was overdone. Published on June 1st, manufacturing report from China introduced a bit of optimism. “There’s a chance that we can push a little bit higher” Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. stated, regarding the Australian dollar.
Aussie added 0.6% with AUD/CAD reaching 0.9628 during Asian trade, after having fallen by 7.7% in May, biggest drop since September 2011. Bloomberg reported that the 14-day relative-strength index for the Australian dollar dropped to 19.5 last month, lowest level since May 2010, and was at 25.5 on May 31st. Levels below 30 show an asset’s price has decreased too rapidly and is about to rebound.
Additionally, official data showed that Retail Sales in Australia increased by a slower than expected rate in April, as weaker spending at universal stores neutralized better sales figures of clothing and shoes. Retail Sales indicated a rise by 0.2% during April to a total of 21.9 billion AUD, while experts estimates showed a 0.3% rise. Sales in Australia dropped by 0.4% in March. Reserve Bank of Australia (RBA) cut base interest rate by 2% during the past 20 months with its current level being set at 2.75%. Australia was one of the countries with record low base interest rates, as the country struggled with strong national currency.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
