Topic: COZfx: AUD/USD weaker as HSBC China PMI remains constant
COZforex: The Australian dollar remained weaker on Thursday in Asia following HSBC final China PMI data that was unchanged from a flash reading and that followed domestic PMI data for December that showed Australia manufacturing dropped to end last year in contraction.
Australia’s performance of manufacturing index in December was down by -0.1 points to 47.6. The index remained in the contraction zone for 10 months of 2013 and rise only in the months of September and October because of a lift in sentiment related to Federal elections.
In commodities, LME Copper prices rise 0.1% or $7.5/MT to $ 7394.5/MT. Aluminium prices dropped 0.4% or $6.5/MT to $ 1764.5/MT.
The December HSBC China Manufacturing PMI came in at 50.5, unchanged from the flash reading and on forecast. China is the top export destination for key Australian commodities such as iron ore.
"The moderation of December's final HSBC China Manufacturing PMI was mainly due to slower output growth," said Hongbin Qu, Chief Economist, and China & Co-Head of Asian Economic Research at HSBC.
"However, the final PMI sustained the fifth above-50 reading in a row thanks to a steady increase of new orders. The recovering momentum since August 2013 is continuing into 2014, in our view. With inflation still benign, we expect the current monetary and fiscal policy to remain in place to support growth."
In technical analysis, coz forex senior derivatives trader Daniel • Moloney said, AUD/USD is predicted to find support at 0.8883, and a drop through could take it to the next support line of 0.8856. Meanwhile, the pair is predicted to find its first resistance at 0.8934, and a rise through could take it to the next resistance line of 0.8958.
(COZ forex UK)