- Traders keeping an eye on Chinese data in light of recent trade war headlines.
- AUD/USD can firm on the result with a target of 0.6930 on the Caixin-sponsored manufacturing PMI data beat.
The Oct Caixin-sponsored manufacturing PMI, which was expected around 51 following yesterday’s NBS measures that showed declines in both the manufacturing and non-manufacturing measures, has arrived and beaten expectations.
Caixin Manufacturing PMI
Caixin Manufacturing PMI (Oct) Actual: 51.7 Expectations: 51 Prior: 51.4
About the Caixin China Manufacturing PMI
The Caixin China Manufacturing PMIâ„¢, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.
FX implications
The AUD was mixed overnight with markets trading cautiously considering the trade war headlines whereby Chinese officials are casting doubts about reaching a comprehensive long-term trade deal with the US, despite the two sides getting close to signing a “phase one” agreement. Coupled with the cancellation of the Chile summit, markets are on the lookout for worsening data from China that will only add to the downside potential in the Aussie. However, this result was at least somewhat promising and AUD/USD can firm on the result with a target of 0.6930. On the downside, Valeria Bednarik, the Chief Analyst at FXStreet explained that the bearish case will be clearer if the pair falls below 0.6840, “although it seems unlikely that such a decline would take place before US employment data.”
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