Australian manufacturing contracted in January, indicating that the nation’s economy remains weak and putting pressure on the Australian dollar. Yet the currency remained little changed today, trading at the highest level since 2008 against the Japanese yen.
The manufacturing index of Australian Industry Group was at 40.2 in January, falling from 44.3 in the prior month. A reading below 50.0 means decline of the sector. The indices for services and construction also showed contraction.
Domestic fundamentals were tough for the Aussie, yet the currency paid no heed for them. Perhaps, hopes for stimulus from the Federal Reserve buoyed AUD. Additionally, tomorrow’s US non-farm payrolls are expected to demonstrate robust growth, adding to the positive sentiment of traders.
AUD/USD rose a little from 1.0415 to 1.0430 as of 23:53 GMT today, bouncing from the daily low of 1.0378. EUR/AUD picked up from 1.3021 to 1.3043. AUD/JPY jumped from 94.83 to 95.67, the highest since August 2008.
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