The Australian dollar is slightly lower, despite getting a boost from some very positive Chinese economic data.
Monday morning the local unit was trading at 89.45 US cents, down from 89.54 cents on Friday.
On Sunday, figures from the Chinese Purchasing Manager’s Index (PMI) showed that manufacturing activity strengthened in August to its highest level in 16 months.
That followed the release of US consumer spending numbers, that edged up 0.1 per cent in July.
Bank of New Zealand currency strategist Mike Jones said the offshore session on Friday night was quiet, dominated by month-end selling.
“US data was mixed and didn’t provide any particular direction for currency markets,” he said from Wellington.
“But, following the weekend’s positive Chinese PMI, the Aussie dollar opened the week on the front foot. It recouped half a US cent of last week’s losses.
“Also, markets are taking some heart over the delay in Western intervention over Syria, so that’s bolstering sentiment as well.”
On Tuesday, the Reserve Bank of Australia will have its monthly board meeting and is widely expected to keep the cash rate unchanged at 2.5 per cent.
On Wednesday, official local economic growth figures will be released.
However, Jones said, the main focus for currency markets this week will be the release US employment figures for August on Friday.
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It will be the last major economic data out before the US Federal Reserve’s policy meeting on September 17-18, when it’s expected to make a decision on the tapering of its massive economic stimulus program.
“It will be very important and will dictate where currencies go this week,” Jones said.
He expects the Australian dollar to trade in a range between 89.30 and 89.60 US cents on Monday.
