23 Jun 2014
AUD buoyed by Chinese data - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes the good performance of the AUD post-Chinese PMI.
Key Quotes
"The Australian dollar has outperformed in the Asian trading session with the AUD/USD rising back above the 0.9400-level. The Australian dollar has derived support from the release of the stronger than expected HSBC China manufacturing PMI survey for June."
"The survey revealed that business confidence in the manufacturing sector increased by 1.4 percentage point to 50.8 in June. It was the highest reading since November 2013 providing a further signal that economic growth in China appears to be accelerating modestly in Q2."
"The pick up in growth is being driven by domestic demand which has been supported by mini stimulus measures lifting the new orders sub-component by 1.8 percentage point to 51.8, while the new export orders sub-component declined by 2.6 percentage points to 50.6 although it still remains in expansionary territory. The latest official manufacturing PMI survey from Japan for June was also released overnight."
"The survey revealed that business confidence in the manufacturing sector increased for the second consecutive month by 1.2 percentage point to 51.1. It was the first time the survey reading was back above the 50-level, which marks economic expansion, since before the implementation of the sales tax hike in April although it still remains some way below the 54.0-level recorded in March."
"The upturn in manufacturing activity after the negative hit from the sales tax hike is being driven by domestic demand with the new orders sub-component increasing by 2.4 percentage points to 52.0, while the new export orders sub-component remained at 49.0. The pace of recovery in manufacturing activity is expected to accelerate in the 2H 2014 as downward pressure on domestic demand from the consumption tax hike fades which may be supported by a gradual recovery in exports."
"The economic recovery after the sales tax hike should create more favourable domestic conditions for yen weakness if Japanese investors become less risk averse. The latest IMM report revealed that speculators have been rebuilding short yen positions in recent weeks alongside the ongoing improvement in global investor risk sentiment. The Fed’s dovish policy stance remains a dampener on USD/JPY upside potential in the near-term."
Key Quotes
"The Australian dollar has outperformed in the Asian trading session with the AUD/USD rising back above the 0.9400-level. The Australian dollar has derived support from the release of the stronger than expected HSBC China manufacturing PMI survey for June."
"The survey revealed that business confidence in the manufacturing sector increased by 1.4 percentage point to 50.8 in June. It was the highest reading since November 2013 providing a further signal that economic growth in China appears to be accelerating modestly in Q2."
"The pick up in growth is being driven by domestic demand which has been supported by mini stimulus measures lifting the new orders sub-component by 1.8 percentage point to 51.8, while the new export orders sub-component declined by 2.6 percentage points to 50.6 although it still remains in expansionary territory. The latest official manufacturing PMI survey from Japan for June was also released overnight."
"The survey revealed that business confidence in the manufacturing sector increased for the second consecutive month by 1.2 percentage point to 51.1. It was the first time the survey reading was back above the 50-level, which marks economic expansion, since before the implementation of the sales tax hike in April although it still remains some way below the 54.0-level recorded in March."
"The upturn in manufacturing activity after the negative hit from the sales tax hike is being driven by domestic demand with the new orders sub-component increasing by 2.4 percentage points to 52.0, while the new export orders sub-component remained at 49.0. The pace of recovery in manufacturing activity is expected to accelerate in the 2H 2014 as downward pressure on domestic demand from the consumption tax hike fades which may be supported by a gradual recovery in exports."
"The economic recovery after the sales tax hike should create more favourable domestic conditions for yen weakness if Japanese investors become less risk averse. The latest IMM report revealed that speculators have been rebuilding short yen positions in recent weeks alongside the ongoing improvement in global investor risk sentiment. The Fed’s dovish policy stance remains a dampener on USD/JPY upside potential in the near-term."