GBP/AUD trades flat early on Friday, showing no change as of 05:20 AM UTC. Currently, one British pound buys 1.8767 Australian dollars.
Yesterday, the pound strengthened after the pair faced opposition from the support level at 1.8650. AUD weakened after China, Australia’s largest trading partner, released disappointing data on manufacturing purchasing managers’ index (PMI). Nevertheless, private media group Caixin just reported its own estimate of factoring activity, showing better than expected results.
Australia’s Manufacturing Growth Slows in October
Shortly after China released official PMI data, Australian Industry Group (AIG) published a report on the manufacturing index as well. As per AIG, factory activity in Australia declined to 51.6 in October (seasonally adjusted), down 3.1 points from September. The Aussie continued its decline against the GBP after the news came out.
Any figures above 50 points suggest expansion, with higher results reflecting stronger expansion during a given month. Thus, the latest results point to much slower growth in the manufacturing sector. Three of the six sub-sectors saw contraction, including metal products, TCF, paper & printing, and building materials, woods, furniture & other.
The modest expansion for the month was driven by continued growth in food and beverage manufacturing. Elsewhere, production, employment and capacity levels were also high for this sector, with many companies handling “earlier than usual” Christmas orders.
When discussing manufacturing activity, the AIG said:
“Five of the seven activity indices in the Australian PMI indicated expanding conditions and two indicated contraction in October. The exports index rose back into expansion, with some respondents noting increased demand from the USA in October. The new orders index fell sharply into contraction in October which suggests more difficult conditions for manufacturers in the coming months.”
UK PM Frustrated with Delay
In the UK, there is no relevant Brexit news to move markets, as the British citizens await the general election on December 12.
Yesterday, Prime Minister Boris Johnson voiced his frustration that Brexit wasn’t happening. Previously, he promised to take the UK out of the bloc on October 31. After failing to secure the parliament’s approval for his deal, European leaders granted an extension until January 31.
“I am, of course, incredibly frustrated that we are not able to get Brexit done today,” the PM said.