AUD/USD: Slow Week to be interrupted by China’s PMI Data

The Australian dollar rallied on the interbank market against the greenback at the end of this past week. The AUD/USD exchange rate settled at 0.6980, registering a 0.50% increase in value reaching its highest level since 24 July. Aussie has established an impressive technical move to the upside that has the potential to generate a new trend development.

Moving forward into the new week, currency traders should embrace significant low liquidity, which can be more exacerbated than what we’ve seen this past week. 

The only risk event scheduled on the economic calendar for the week ahead that has the potential to disrupt the market volatility is the manufacturing PMI data in China due on Tuesday and Caixin/Markit manufacturing PMI is due on Friday.

According to the market consensus, the PMI data is expected to inch lower from 50.2 to 50, while the Caixin/Markit manufacturing PMI is expected to come flat at 51.7. Any reading above the 50 mark indicates expansion in the manufacturing activity.

Aussie has also benefited from the carry trade inflow, as the status of high yielding currency is still appealing to institutional investors.

During the London trading hours Aussie was seen quoted higher and trading within a range of 0.6978 and 0.6999.

Elsewhere, the precious metal Gold has experienced its strongest weekly rally since the beginning of August. XAUUSD touched a fresh new 7-week high tracking its seasonal pattern and settled at $1,510 per ounce at the end of Friday close. Most likely the safe haven bids have been boosted after the US President Donald Trump was impeached by the House of Representatives

The dollar index, which gauges the greenback’s strength against a basket of major currencies slipped lower and was seen quoted as low as 96.73 during London trading hours.

The domestic benchmark equity index S&P/ASX 200 index settled on Monday at 6804.86 registering a modest 0.25% loss. Year-to-date the Australian stock market has gained double digit returns of 20.52%.

Elsewhere, the Australian 10-year government bond yield was closed up 5.47% at 1.379 on Monday compared with its previous close of 1.307.

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