Forex - Aussie hold weak after HSBC PMI shows manufacturing on edge

Investing.com - The Aussie fell sharply in Asia on Monday as China's official and HSBC's survey of manufacturing signalled China on the edge of contraction.

AUD/USD changed hands at 0.8441, down 0.73%, after the data, while USD/JPY traded at 118.90, up 0.25%.

China's official manufacturing activity in November came in at 50.3 in expansion territory, but lower than the 50.6 expected and compared to 50.8 in October. The HSBC manufacturing index met expectations at 50.

In Australia, third quarter inventories rose 0.7% and profits rose 0.5%, ahead of the RBA commodity price index, which declined 16.9% in the previous month.

Earlier, the TD-MI inflation gauge for November rose 0.1% month-on-month, compared to a 0.2% on month gain in October and Australia's November manufacturing index rose 0.7 points to 50.1, into expansion territory from 49.4.

Japan said third quarter non-financial firm capital spending rose 5.5% year-on-year, up from a 0.2% gain in the second quarter.

Last week, oil prices tumbled following Thursday’s decision by the Organization of the Petroleum Exporting Countries to keep production quotas unchanged, fuelling fears over a global supply glut.

The US Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.05% to 88.37.

In the euro zone, data on Friday showed that the annual rate of inflation slowed to a five year low of 0.3% in November. The weak data was seen as increasing the likelihood that the European Central Bank will implement quantitative easing measures.

Demand for the dollar continued to be underpinned by expectations that the Federal Reserve is moving closer to raising interest rates, as central banks in Japan and the euro zone are easing monetary policy to spur growth and stave off the threat of deflation.

In the week ahead investors will be focusing on the outcome of a policy meeting of the ECB on Thursday, which is to be followed by the U.S. jobs report for November on Friday. Central banks in the U.K., Canada and Australia are also to hold policy setting meetings next week.

On Monday, the U.K. is to publish its manufacturing index as well as data on net lending to individuals.

In the U.S., the Institute of Supply Management is to release data on manufacturing activity.