China is unstoppable – PMI for September exceeded expectations. When Australia’s main trade partner gets a good figure – the Aussie rallies. After taking a dip on weak domestic figures, the Chinese release provides new momentum for the Aussie.
Just before entering a public holiday,China released the purchasing managers’ index for September. The score was 53.8, higher than 52.5 that was expected and significantly higher than last month’s score – 51.7.
The Aussie reacted with a neat rise – from 0.9660 to 0.9700. Stronger manufacturing in China is good news for Australia that enjoys export to China.
Earlier this week, it already reached 0.9735, but then cooled off due to poor domestic building approvals. Australian building approvals fell by 4.7% instead of remaining unchanged. Australia’s housing sector is still hurt by the wave of rate hikes.
The pause in the Aussie rally was expected – not only did it enjoy the quick fall of the US dollar, it rose too fast and got a cold shower – building approvals.
But now, the fresh release from China provides more fuel for the Aussie. The next peaks from 2008 provide the next resistance levels: 0.98, a round number and a peak in July 2008, and then the all time high of 0.9849. The levels that it recently crossed provide support.
The Aussie is now in a good position towards the next week which is critical – it consists of a rate decision and employment figures.
Will it continue rising?
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