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AUD/USD advances after China’s manufacturing PMI outstrips expectations, Australian data

Australian dollar distanced from almost three-month lows against its US counterpart on Monday, after a report showed that activity in Chinas sector of manufacturing expanded more than initially projected, while a string of economic data released out of Australia left unchanged the overall view that Reserve Bank of Australias monetary policy will remain intact.

Having touched its lowest point since September 4th at 0.9056 on November 29th, AUD/USD climbed to a daily high at 0.9168 at 7:10 GMT on Monday, after which the pair consolidated at 0.9160, gaining 0.54% for the day. Support was likely to be received at November 29th low, 0.9056, while resistance was to be encountered at November 26th high, 0.9204.

On Sunday the National Bureau of Statistics and China Federation of Logistics and Purchasing said that the gauge of activity in Chinese manufacturing came in at a value of 51.4 in November, confirming the reading reached in October, which was also the highest in 18 months. Experts had projected that the index will slow down to 51.1 in November.

These better-than-projected results have been supported mostly by firm domestic and foreign demand. The sub-index of output rose to 54.5 in November from 54.4 in October, while the gauge of new export orders jumped to 50.6 last month from 50.4 in October. An index, tracking employment, gained for a second consecutive month to reach a value of 49.6, or the strongest reading since March.

At the same time, HSBC Holdings Plc and Markit Economics reported that the final value of their manufacturing PMI was 50.8 in November. The preliminary value of the index for November was 50.4, while the final value for October – 50.9. This data revealed that manufacturing activity gained for a fourth month in a row and also at the fastest pace since March. The PMI came in consonance with the official government data, announced during the weekend.

The above mentioned data points caused influence upon the Aussie, as China is Australiaa largest export market.

Meanwhile, according to a report by the Australian Industry Group (AIG), the index, gauging manufacturing activity in Australia, plunged into the zone pointing contraction in November, coming in at a value of 47.7, as a month ago the index stood at 53.2.

The number of building approvals in the country fell 1.8% in October compared to September, after in September compared to August approvals climbed 16.9%. Experts had expected that the number will decrease more, by 5.0% in October. In annual terms, the number of approvals rose 23.1% in October, exceeding preliminary estimates of a 17.0% gain and following the 22.2% advance in September.

Corporate operating profits in Australia rose 3.9% during the third quarter of the year, outpacing projections of a 1.0% gain, after in Q2 profits climbed 0.4%, according to revised data.

The yield on Australian three-year bonds gained five basis points, or 0.05 percentage point, to reach 3.11%, while the yield on nations benchmark 10-year bonds gained six basis points to reach 4.29%.

On Tuesday Reserve Bank of Australia (RBA) policymakers are expected to hold a meeting on policy, at which they may decide to leave the benchmark interest rate without change at the already record low level of 2.50%, as experts predict.

“The Aussie has started the week on a firmer footing, which is all to do with the China data,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank Ltd. in Sydney, cited by Bloomberg News. “The conditions for something of a reversal are perhaps falling into place. The market is looking for an excuse to buy back the Aussie and tomorrow’s RBA statement may provide that excuse.”

Elsewhere, the Aussie was gaining against the euro as well, with EUR/AUD cross down 0.42% on a daily basis to trade at 1.4853 at 7:50 GMT. AUD/NZD pair was falling 0.44% today to trade at 1.1154 at 7:52 GMT.

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