During the Australasian session less-than-impressive manufacturing reports for Australia and China left the commodity-driven ‘Aussie’ weaker against rivals like the Euro.
The Australian Dollar posted widespread declines as the HSBC/Markit measure of manufacturing slipped from 50.8 to 50.5 and the Australian manufacturing gauge narrowed, edging down from 47.7 to 47.6, well below the 50 mark separating growth from contraction.
As Australia relies heavily on China for trade, the lacklustre result from the Asian nation piled pressure on the Australian Dollar.
The Chinese HSBC figures were released with this statement from chief economist Hongbin Qu; ‘The moderation of December’s final HSBC China manufacturing PMI was mainly due to slower output growth. However, the final PMI sustained the fifth above-50 reading in a row thanks to a steady increase in new orders’.
Meanwhile, AiG executive Innes Willox said this of Australia’s own dismal manufacturing performance; ‘The sector, and indeed the broader economy, remains stuck behind the eight ball and manufacturing in particular is, as yet, in no position to assume a role in generating alternative sources of growth as the mining boom fades. Notwithstanding that interest rates are at low levels and that the Australian Dollar appears to be on its way back down to more realistic levels, conditions in the sector remain very tough.’
The ‘Aussie’ broadly softened in response to these results and the Euro was able to advance.
As European trading got underway the EUR/AUD pairing extended its advance as upbeat domestic manufacturing reports gave the common currency a boost.
Figures revealed that the Eurozone’s manufacturing sector grew by more-than-forecast in December, largely thanks to a stronger-than-expected performance from Germany, the currency bloc’s largest economy.
Before the weekend EUR/AUD volatility could be inspired by China’s non-manufacturing PMI, due out at 01:00 GMT.
However, with significant economic news for the Eurozone thin on the ground tomorrow movement may be limited.
Euro (EUR) Exchange Rates
As of 11:10 GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3727 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8291 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5449 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6766 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4589 <