Australian Dollar Pares Gains After China’s Manufacturing Activity Contracts
The Australian dollar dropped more than 0.4 percent versus the U.S. dollar in Asian trade on Thursday, reversing gains on the back of China’s manufacturing data release.
The pair AUDUSD spiked to as high as 0.74038 following Australia’s stronger-than-expected retail sales. According to the Australian Bureau of Statistics, the country’s retail sales rebounded sharply in April. Boosted by strong demand for food sold by cafes and restaurants and products in department stores, retail sales rose by 1.0 percent in April on a monthly basis.
The reading was well above the 0.3 per cent rise expected by economists and outpaced March’s rate at 0.2 percent.
However, China’s manufacturing activity unexpectedly retreated for the first time in 11 months. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) fell to 49.6. A result below 50 demarcates growth and contraction on a monthly basis. The survey showed companies shed more jobs as demand weakened and shrinking factory prices dented profits.
The weak figure, which extended a streak of declines to three months starting in March, was well below April’s 50.3 and economists’ forecast of 50.1
Later on Thursday, ADP nonfarm payrolls report and the weekly report on initial jobless claims will be published, followed by data on non-manufacturing PMI released by the Institute for Supply Management.
Sell Stop at 0.74000, Take profit 0.73600, Stop loss at 0.74200