“The Aussie dollar began the session on the front foot given the China manufacturing data and we saw another leg up after building approvals came in well above expectations,” said Jim Vrondas, the Sydney-based chief currency and payment strategist at OzForex Ltd. “It will struggle above 90 cents.”
Australia's dollar rose 0.9 percent to 89.83 U.S. cents as of 5:28 p.m. in Sydney after touching 88.93 on Aug. 30, matching the least since Aug. 5. It gained 1.8 percent to 88.97 yen. The kiwi climbed 1.1 percent to 78.09 U.S. cents, poised for the biggest gain since July 25, and jumped 2 percent to 77.36 yen, set for the largest advance since April 8.
China's Purchasing Managers' Index was at 51.0 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. HSBC Holdings Plc and Markit Economics said today a final reading of their PMI for China was 50.1, with readings above 50 indicating expansion. China is the biggest export destination for Australia and New Zealand.
Eoin Treacy's view The RBA has been central to the weakness
of the Australian Dollar this year and appears willing to do whatever is necessary
to promote growth even as commodity exports and development of new mines has
moderated. Therefore the potential for interest rates to fall further remains
a realistic possibility.
The Australian Dollar has stabilised in the region of 90¢ against the US Dollar but a sustained move above 92¢ would be required to break the progression of lower rally highs and begin to question supply dominance.
Against a background of loose monetary policy the stock market is responding reasonably favourably with the ASX rallying back to test the May peak. While somewhat overbought in the very short-term a sustained move below 5000 would be required to question potential for higher to lateral ranging. In US Dollar terms, the Index remains decidedly rangebound.