The independent HSBC / Markit Manufacturing PMI for China came out below expectations for April: 49.2 points, reflecting a slightly more pronounced slowdown than had been anticipated. This is the preliminary read and could still change, but it certainly goes hand in hand with other signs of slowdown from the world’s no. 2 economy and Australia’s no. 1 trade partner.
The Aussie is pressured, losing previous gains.
Early in the week, the Aussie rose and fell on weekend news from China. The authorities decided to cut by 1% the Reserve Ratio Rate (RRR) providing more stimulus for the economy and indirectly to Australian commodities.
However, after the initial rush, the mood in the markets changed and a different perception took hold: the Chinese move came because of significant weakness and is a worrying sign.
Also stronger US data helped push the pair lower, but not all is bad in Australia, so the pair isn’t doing too bad: inflation came out stronger than expected and could mean that the RBA might not really be in a rush to cut in May.
More: AUDUSD Looks For Resistance; – Elliott Wave Analysis
The pair is trading above 0.77, but well off the highs above 0.78 seen beforehand.
