Australian dollar higher versus US peer on China PMI

Australian dollar recorded gains against its US counterpart on Monday, following the release of Chinese PMI for June.

AUD/USD rose to 0.9200 at 6:19 GMT, after dipping to 0.9112 on Friday, the lowest point since September 8th 2010. Support was expected at June 28th low, 0.9112, while resistance was to be encountered at June 23rd high, 0.9250.

Australian currency advanced after Junes final reading of the Chinese PMI showed 50.1, slightly above the projected 50.0, but below the result during May, 50.8.

Additionally, Macquarie, Australia’s largest investment bank, could increase its earnings by 1.4% for each one cent AUD/USD decreases, according to Christopher Hall, a senior investment officer at Adelaide-based Argo Investments Ltd. (ARG), Bloomberg imparted. Net income could climb as much as 4% in the second quarter of the year. The investment bank’s revenue from the United States and Canada mostly, jumped to 33% of the total in the year ended March 31st from 8% four years ago. “if the currency remains low, profit accretion will certainly be significant going forward,” Argo’s Hall stated, cited by Bloomberg.

Aussie has fallen 7,5% year-to-date, or the second worst performing major currency, as Japanese yen has been classified first. Analysts have reduced their annual forecasts for the Australian dollar and now expect the AUD/USD cross to trade at 0.95 from 1.01 at the end of March.

Later on Monday the Institute of Supply Management is expected to release a report on activity in the sector of manufacturing in the United States, which will focus attention on the AUD/USD pair as well.