The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending lower on Monday after the US economy produced some rather upbeat economic data. The US Dollar exchange rate has been on a roll recently after US core-inflation stats spurred a rally.
The US Personal Income figure registered a 0.4% improvement in April after March’s 0.0% and resided a shade above the 0.3% forecast. Additionally, the final Markit US Manufacturing Purchasing Managers Index (PMI) reached 54.0 in May.
Markit economist Chris Williamson: ‘With manufacturers reporting the smallest rise in new orders since the start of last year, the survey provides further evidence that the strong Dollar is hurting the economy.
‘While the economy still looks set to rebound from the decline seen in the first quarter, the extent of the second quarter recovery therefore remains highly uncertain and could well disappoint.’
Next up was the US ISM Manufacturing index which rose from 51.5 to 52.8 in May.
Industry expert James Knightly stated: ‘This is above the 52.0 consensus expectation and is the best reading since February.’
Meanwhile, the ‘Aussie’ enjoyed some support against other majors when the Australian AiG Performance of Manufacturing Index recorded growth for the first time in six months. The manufacturing index climbed from 48.0 to 52.3 in May.
Additionally, positive developments in the Chinese economy also helped the Australian Dollar trading against a host of other majors; as China is Australia’s largest trading partner any developments in the region can impact the Australian Dollar exchange rate. China’s Manufacturing PMI came in at 50.2 in May, after April’s 50.1.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to be in for a hefty day of fluctuations on Tuesday as the Reserve Bank of Australia (RBA) makes its latest interest rate announcement. After cutting the official cash rate down to 2.0% in May, speculation over whether a May rate cut will occur in June is heightening.
Meanwhile, the US Dollar will be in for a wild ride this week with the US Change in Non-Farm Payrolls and Unemployment Rate stats due on Friday. Any upbeat labour market data is likely to spur speculation on whether or not the Federal Reserve will be in a position to hike interest rates this year.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trending in the region of 0.7605.
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