Australian Dollar Holds to Gain Based on Chinese Manufacturing Data

Thanks to China’s manufacturing industry’s more than expected expansion, the Australian Dollar has been able to hold to an advance in 2012. Incidentally, China is the biggest trading partner of Australia.

Gavin Stacey who works as the Chief Interest Rate Strategist for Barclays stated that the global backdrop calls for a nice picture ahead for the Australian Dollar. He added that there are very slim chances that the major currency of the South Pacific nation will experience a selloff, as the global manufacturing backdrop is currently enhancing.

Australian Dollar, also called as Aussie (AUD) fondly, advanced against most of the major peers. The fate was similar for its New Zealand counterpart as well. Today, AUD has advanced by 0.1% against USD and is at $1.0385 currently. On the other hand, it has posted a gain of 0.4% against Yen to jump up to 89.44 Yen per AUD. The major New Zealand currency Kiwi has surged ahead by 0.4% against USD. It posted a gain of 0.7% against Yen as well. Incidentally, AUD has seen a growth of 1.7% on a whole in 2012 against USD. Kiwi, had an even better growth against USD, that of 5.9% in 2012.

The 10-year bond yield of Australia dropped by 5 basis points and is at 3.27% currently. Earlier today, it touched 3.23%, however, later recovered from the same. The 2-year swap rate of New Zealand, on the other hand, declined by 2.5 basis points and finished at 2.67%.

The Chinese manufacturing data was released based on a joint survey conducted by the Markit Economics and HSBC Holdings Plc. According to the survey gauge, the same is at 51.5 for the month of December. The figure was 50.5 for last month and the preliminary estimation for this month was 50.9. Incidentally, any reading above 50 denotes expansion in the industry. According to a separate gauge which is controlled by the Chinese Government, the reading for December is 51. This is better than 50.6 reading of the same gauge for November.

It is predicted that manufacturing index for US, will also rise up to 50.3 in December from 49.5 that of November. The statistics will be released by the Institute of Supply Management. A separate gauge shows that in the week through 11th December, the bets for a gain for Kiwi was at 14739.