The Australian dollar strengthened against the other major currencies in the Asian session on Wednesday, following the release of strong building approvals and Chinese manufacturing PMI data.
Data from the Australian Bureau of Statistics showed that the total number of building approvals issued in Australia jumped 14.3 percent, beating expectations for an increase of 10.7 percent following the 9.1 percent jump in the previous month.
Data from the National Bureau of Statistics showed that the Chinese manufacturing sector turned barely back into expansion territory in March, with a PMI score of 50.1. That beat forecasts for 49.7 and moves up from 49.9 in February. It also moves barely back above the boom-or-bust line of 50 that separates expansion from contraction.
In other economic news, data from HSBC showed that Chinese manufacturing sector slipped into contraction in March, with a PMI score of 49.6.
Data from the Australian Industry Group revealed that the manufacturing sector in Australia continued to contract in March, albeit at a slower pace, with a Performance of Manufacturing Index score of 46.3. That’s up from 45.4 in February, although it remains below the boom-or-bust line of 50 that separates expansion from contraction.
Tuesday, the Australian dollar fell against its most major rivals, amid growing expectations of a rate cut by the Reserve Bank of Australia next week. The Australian dollar fell 0.61 percent against the U.S. dollar, 0.57 percent against the yen and 0.54 percent against the Canadian dollar.
In the Asian trading today, the Australian dollar rose to a 2-day high of 1.0439 against the NZ dollar, from yesterday’s closing value of 1.0171. The aussie may test resistance near the 1.04 region.
Against the U.S. and the Canadian dollars, the aussie advanced to 0.7662 and 0.9702 from yesterday’s closing quotes of 0.7605 and 0.9645, respectively. The aussie may test resistance near 0.78 against the greenback and 0.97 against the loonie.
The aussie edged up to 91.56 against the yen and 1.4057 against the euro, from yesterday’s closing quotes of 91.35 and 1.4106, respectively. On the upside, 93.50 against the yen and 1.36 against the euro are seen as the next resistance levels for the aussie.
Looking ahead, PMI reports for March from major European economies are due in the European session.
In the New York session, U.S. ADP private sector employment data, U.S. ISM manufacturing PMI and Canada RBC manufacturing PMI- all for March are slated for release.
At 9:00 am ET, U.S. Federal Reserve Bank of San Francisco President John Williams will participate in a panel discussion titled “Financial Stability: How Essential Financial Stability be to Central Banks?” at the Federal Reserve Bank of Atlanta’s financial markets conference “Central Banking in the Shadows: Monetary Policy and Financial Stability Post crisis,” in Stone Mountain.
About an hour and a half later, at the same conference in Stone Mountain, U.S. Federal Reserve Bank of Atlanta President Dennis Lockhart will participate in a panel discussion titled “Monetary Policy: Will the Traditional Banking Channel Remain Central to Monetary Policy?”.
The material has been provided by InstaForex Company – www.instaforex.com