Australian dollar advanced against its US counterpart on trading Thursday, as optimism over Chinese economic development was boosted, after an official report said that manufacturing activity rose more than expected in August.
AUD/USD rose to a session high at 0.9006 at 7:27 GMT. Support for the pair was likely to be received at August 6th low, 0.8907, while resistance was to be seen at August 20th high, 0.9122.
Australian currency received support after earlier today it became clear that Chinese manufacturing PMI advanced to a four-month high, showing a reading of 50.1 in August, outpacing preliminary estimates of a value of 48.2. The index stood at 47.7 in June. Values above 50.0 usually imply that activity has expanded. This data caused positive influence, as China is Australias largest export partner.
Another report, by the Conference Board, revealed that its leading index for Australia dropped by 0.2% in the month of June, after remaining flat a month ago.
Meanwhile, the minutes of Fed’s most recent meeting showed that policymakers were “broadly comfortable” with Chairman Ben Bernanke’s time frame to begin asset purchase tapering this year, if the economy improves, with a few officials saying a reduction might be necessary soon. “Almost all committee members agreed that a change in the purchase program was not yet appropriate,” and a few stated that “it might soon be time to slow somewhat the pace of purchases as outlined in that plan,” according to the minutes of the Federal Open Market Committee’s July 30-31st meeting released yesterday. Recent economic data out of the United States was described as “mixed” in the minutes, so it is understandable that tapering the easing program may be delayed, if economic development still showed weak results.
Elsewhere, the Aussie was trading higher against the euro, with EUR/AUD cross losing 0.58% on a daily basis to 1.4808 at 7:45 GMT. AUD/NZD pair was gaining for the day, up by 0.46% to trade at 1.1490 at 7:45 GMT.