Forex - AUD/USD drops on Chinese factory output data

Published 09/30/2012, 09:39 PM
Updated 09/30/2012, 09:41 PM
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Investing.com - The Australian dollar fell against the greenback on Monday after soft Chinese manufacturing data spooked investors and bolstered sentiments the global economy faces building headwinds.

In Asian trading on Monday, AUD/USD hit 1.0340, down 0.37%, up from a session low of 1.0339 and off from a high of 1.0364.

The pair was likely to test support at 1.0329, Wednesday's low, and resistance at 1.0474, Friday's  high.

Soft factory data in China, a key Australian export market, sparked demand for the safe-haven greenback, bruising the Aussie in the process.

The HSBC China Manufacturing purchasing managers index came to 47.9 for September, up slightly from 47.6 in August.

A reading of 50 separates expansion and contraction.

Official Chinese data painted a similar picture.

China's official factory purchasing managers' index hit 49.8 in September, up from 49.2 in August, according to the country's National Bureau of Statistics.

The official numbers still missed the 50 threshold separating expansion and contraction.

Meanwhile in Japan, big manufacturers remained pessimistic over the economy during the July-September period.

The Bank of Japan reported earlier that the Tankan Manufacturing index fell to a seasonally adjusted -3 in the third quarter, from -1 in the second quarter.

Analysts had expected Tankan Manufacturing index to fall to -3 in the last quarter.

In the U.S., meanwhile, the Chicago purchasing managers' index contracted for the first time since September 2009, dipping to seasonally adjusted 49.7 compared to 53.0 August.

Analysts had expected the Chicago PMI to remain unchanged at 53.0 in September.

The Thomson Reuters/University of Michigan's final index on consumer sentiment for September fell to a seasonally adjusted 78.3 from 79.2 the previous month.

Analysts had expected the index to fall to 79.0 in September.

The Australian dollar, meanwhile was down against the euro and down against the yen, with EUR/AUD up 0.03% at 1.2390 and AUD/JPY down 0.32% at 80.63.

Later Monday in the U.S., the Institute for Supply Management will release its manufacturing purchasing managers' index, a leading indicator of economic health.

Also Monday, Federal Reserve Chairman Ben Bernanke is due to speak at the Economic Club of Indiana, in Indianapolis.









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