Australian Dollar rallies to 1.0465 on HSBC PMI - FX Solutions Forex Update

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Date: Mon, 12 Sep 2011 Time: 7:27 AM
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With the Australian Dollar rallying to 1.0465, Chris Advincula of FX Solutions (http://www.fxsolutions.com/) provides forex traders with an overview of currency market activity and news on 24th August 2011.

"The Australian Dollar rose from 1.0395 to test 1.0465 on two buoyant news in the Asian and early European session that prompted buying and a fair amount of risk-appetite.

China's HSBC Aug Flash Purchasing Manager's Index rose to a better-than-expected 49.8 against the forecasted 45.0. Compared to last month's number of 49.3.

On his recent trip to China, US vice-president Joe Biden said that the Chinese don't view the U.S. as a declining economic power. He also said "While the Chinese will continue to let their currency be revalued marginally, I don't think we're going to see any substantial change in 12 months".

The Aussie Dollar initially gained 30-pips to 1.0430 after the Chinese HSBC PMI number and received another 20-pip gain from the comments of the RBA Deputy governor, Battellino. The yields on the Aussie 2yr-10year government bonds rose from 4 to 5 basis points as well.

RBA Deputy Chief Ric Battellino who said that inflation had also turned out to be higher than expected and they had to revise their forecasts for 2011-2012. He said the central bank considered raising rates this month to stave inflation, however stayed at 4.75% due to acute uncertainty of the global financial markets. He also said that the mining boom turned out to be stronger than expected against subdued consumption and a strong local dollar."

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