- AUD/NZD corrects higher following Caixin Manufacturing PMI beat.
- The Reserve Bank Board for Australia meets on September 3 as the next major focus.
AUD/NZD is currently trading at 1.0677, slightly up on the session by 0.06% having ranged between 1.0662 and 1.0686 on the day. The Aussie has firmed from the opening gap lows following the weekend Chinese data, which disappointed in the official Manufacturing PMI arriving at 49.5 vs expected 49.6. However, in recent trade, more positive news in Caixin Manufacturing PMI, which focusses more on small to medium-sized business, arrived at 50.4 and back into expansion territory, beating the estimate of 49.8 and the prior 49.9 – This was a five-month high and has propelled the Aussie off its lows.
Meanwhile, there is a focus on Hong Kong while protests turned violent again over the weekend, the recent rally to fresh highs in the Dollar, piercing the 99 handle for the first time since 2017 and , above all, we have the Reserve Bank of Australia (RBA) in focus for this week as well the Australian Gross Domestic Produce for the second quarter.
RBA in focus
The Reserve Bank Board meets on September 3 and analysts at Westpac expect that the Board will decide to keep rates on hold at the meeting but continue to expect the next rate cut to occur in October:
“A key signal around the Governor’s Statement following the decision next week will be whether the Governor continues with the wording “ease monetary policy further if needed”. “If needed” was used in both July and August and seemed to imply a degree of patience with rates remaining on hold at the August and, we believe, the September meetings. However, those words were not used in June and we saw a follow up move in July. If the “if needed” is still used in the Statement then it will not necessarily preclude a move in October – it might be considered prudent to break with that signalling approach but an absence of “if needed” will certainly be very encouraging for our October view.”
AUD/NZD levels
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