Australian Dollar Mute As Manufacturing Index Shows Contraction

By Eric Andersen,

THE TAKEAWAY : Aussie Manufacturing Performance Index Falls to 43.9 from 49.5 > Market Largely Unresponsive as Traders Wait on RBA Rate Decision > AUDUSD Falls, but Quickly Recovers

Data released by the AustralianIndustry G ro u p showed a decline in the manufacturingperformance index from 49.5 to 43.9 in April. The lower figureindicated a contraction in the Aussie manufacturing sector andnears the index’s two-year low of 42.3.

The market’s response was muted astraders await, first, the results of the Chinese Purchasing ManagerIndex and, second, the Reserve Bankof Australia (RBA) ratedecision . Both figures are due out in a few hours . The latter figure, the RBA cash ratedecision, is the major market mover over the next few hours, andAUDUSD will likely see a lot of activity if the RBA board surprises traders by holding the figure constant at 4.25 percent.Currently, analysts overwhelmingly expect an interest rate cut of 25 basis points to 4.00percent.

In the minutes following the performance of manufacturing index release, the AUDUSD currency pair suffered a small drop from 1.0420 to 1.0418, but quickly recovered.
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/04/30/Australian_Dollar_Mute_as_Manufacturing_Index_Shows_Contraction.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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