Australian Dollar Sold As Chinese PMI Data Disappoints

By Eric Andersen,

THE TAKEAWAY : Chinese Manufacturing PMI Rose to 53.3 in April > Fears of Global Growth Slowdown Renewed, Leading Traders to Adjust Portfolios > AUDUSD Fell

Data published by the China Federation of Logistics and Purchasing shows that the country’s manufacturing purchasing managers’ index increased to 53.3 in April from 53.1 in March. This change surprised traders who expected a slightly larger figure of 53.6 and initiated an AUDUSD selloff following the figure’s release.

A growing Chinese economy is a boon to local nations that rely on the country for trade, but today’s data release did not convince traders that the nation’s economy is poised to reverse its deceleration of growth. As fears of a global slowdown of economic growth were rekindled, traders sold currencies native to exporting countries reliant on Chinese consumption, like the Aussie.

The Australian dollar follows poor Chinese PMI since a faltering Aussie export sector would suggest that the likelihood of a central bank rate cut is more likely.

In the moments after the release, the AUDUSD fell from 1.0420 to 1.0412.

Overall, price action on the Aussie was minimal as traders focus on the RBA rate decision due out later this morning . Currently, analysts overwhelmingly expect a n interest rate cut from 4.25 percent to 4.00 percent.
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Original Article: http://www.dailyfx.com/forex/market_alert/2012/05/01/Australian_Dollar_Sold_as_Chinese_PMI_Data_Disappoints.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.