Australian Dollar Declines After China PMI

Australian Dollar Declines After China PMI


The Australian dollar slipped against its major opponents in the Asian session on Thursday as traders sold high-yielding currency after data showed that Chinese manufacturing contracted and Japanese exports dropped for the third successive month.
The survey results released by Markit Economics showed that flash HSBC/Markit manufacturing purchasing managers' index (PMI) rose to 47.8 in September from 47.6 in August. A PMI reading below 50 suggests contraction of the sector.
The manufacturing output index dropped to a 10-month low of 47 in September from 48.2 in August.
Japan posted a merchandise trade deficit of 754.127 billion yen in August, the Ministry of Finance said today.
Exports were down 5.8 percent on year beating forecasts for a contraction of 7.5 percent, whereas imports fell 5.4 percent after rising 2.1 percent a month earlier.
Australia's industrial sector in undergoing a moderate recovery in the September quarter after a prolonged period of contraction, the latest Westpac-ACCI Survey of Industrial Trends showed.
The Westpac-ACCI actual composite rose to 52.4 in the September quarter from 48.3 in the June quarter. This is the first above-50 reading since the March quarter 2011.
Westpac said that the improvement in the actual composite is best regarded as evidence of the manufacturing sector stabilising. The rate cuts provided by the Reserve Bank over the past year have benefited the sector directly and indirectly, the report said.
The aussie declined to a 9-day low of 1.0406 against the U.S. dollar and a 1-week low of 81.45 against the Japanese currency and the aussie may break 1.035 and 81.00, respectively on the downside. The aussie ended yesterday's trading at 1.0483 against the greenback and 82.17 against the yen.
Against the Canadian unit, the aussie edged down to 1.0177 from Wednesday's close of 1.0219. The next support level for the aussie-loonie pair is likely seen at 1.015.
The aussie hit a 2-day low of 1.2609 against the NZ dollar, after climbing to a 3-day high of 1.2703 in early deals. On the downside, the aussie may break 1.255 level. At yesterday's New York session close, the pair was quoted at 1.2682.
Statistics NZ reported that New Zealand's economy expanded 0.6 percent in the second quarter of 2012 compared to the previous three months. That beat forecasts for an increase of 0.4 percent following the downwardly revised 1.0 percent expansion in the first quarter (originally 1.1 percent).
On a yearly basis, GDP jumped 2.6 percent, also beating estimates for an increase of 2.4 percent, which would have been unchanged from the previous three months.
The aussie also underperformed against the euro, sliding to as low as 1.2503. The pair ended deals at 1.2455 yesterday. The aussie may break 1.255 level, if it slides further.
Looking ahead, Bank of Japan's monthly economic report is due shortly.
German producer prices, U.K. retail sales and Swiss trade data - all for August, PMI's from major European economies and Switzerland's second quarter industrial production are expected in the European session.
From the U.S., weekly jobless claims for the week ended September 15 and leading indicators for August are expected in the American morning session.