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The Aussie dollar is holding on above the US 70 cents level on the back of China’s manufacturing data that came out better than market expectation.

“It (China PMI data) has come at 49.8 (expected 49.7), although the second month of contraction, still better than estimates,” said Stephen Innes, senior trader at FX/CFD firm OANDA Australia and Asia Pacific. 

In response, Innes said “The Aussie has turned slightly bid on the data trading above .7025 but still well below the critical .7050-60 level.”

“I suspect the market will take a collective sigh of relief the data was mildly supportive and given Aussie positioning in the market (short), we could see some follow through support on profit taking but the data in itself is in no way a game changer,”

Innes also noted that “Currency traders are eyeing the reaction on local equity market for clues and so far we’re not seeing much of a pop.”