- Australian PMIs beat expectations with economic activity growing in June
- Australian composite 52.6 June vs 28.1 May boosting Australian Dollar (AUD)
- US homes sales surge +16.6% in May boosting hopes of V-shaped recovery dragging safe haven US Dollar (USD) lower
- At 14:15 UTC, Australian Dollar US Dollar exchange rate (AUD/USD) +0.9% at US$0.6971
After surging 1% in the previous session the Australian Dollar is on tear once again today versus its US counterpart.
At 14:15 UTC, AUD/USD is trading +0.9% at US$0.6971, at the high of the day and a level last seen on 16th June after upbeat Australian PMI and strong US data fuels risk appetite.
The Australian economy is showing tentative signs of growth, with activity moving back into expansionary territory for the first time since the coronavirus outbreak.
According to data from Markit and Commonwealth Bank the economy bounced back into expansion with the composite PMI printing at 52.6 in June, indicating modest growth as businesses began to reopen in May. The level 50 separates expansion from contraction.
The recovery has been principally led by the service industry, which expanded for the first time in 5 months in June, whilst the manufacturing sector contracted but at a much slower pace.
Confidence is improving, however despite the encouraging report, companies also reported that they are still reducing their workforces for a fifth consecutive month.
There is no more high impacting Australian Dollar domestic data this week. This means that the risk sensitive Aussie Dollar will be driven by risk sentiment over the coming days.
Also boosting risk sentiment today is strong US PMI data and outstanding home sales figures. Home sales soared by a record 16.6% in May following -5.2% decline in April. Expectations were for an increase in the region of 3.5%.
The data suggests that the US housing market is on the cusp of a recovery, which, in addition to better than forecast US PMI data is boosting optimism of a V-shaped economic recovery. The upbeat data is seeing demand for riskier assets and currencies rise, whilst the safe haven US Dollar has fallen out of favour.
Looking ahead, there is no high impacting US data until Thursday, which sees the release of US durable goods orders and initial jobless claims.
