Australian Dollar Drops Prior To China and Eurozone PMIs

By TraderVox.com

Tradervox.com (Dublin) – The Aussie dropped against most of its peers today prior to reports that are projected to show signs of decline in global manufacturing. The South Pacific dollars dropped before the release of a report on Chinese factory output and a similar report on European purchasing managers’ index by HSBC Holdings Plc and Markit Economics. The Aussie declined to 0.1 percent from a week’s low versus the US dollar while New Zealand dollar’s declines were limited after a report showing the nation’s current account deficit was less that market expectation.

According to Joseph Capurso, a Sydney-based Strategist at Commonwealth Bank of Australia, global sentiments are going to push the Australian dollar down. He indicated that the China and Euro Zone PMIs to be released this week constitute a downside risk for the Aussie. Analysts are predicting that the Aussie will rise by 1.9 percent this quarter while the kiwi is projected to increase by 3.1 percent in the same period. Australia is enjoying good ratings with the Standard and Poor’s as it affirmed its AAA credit rating today. According to a statement to the press, Australia has ample fiscal and monetary flexibility, public policy stability, economic resistance and its financial sector is sound. The country is also highly ranked by Moody’s and Fitch rating companies.

The Australian dollar dropped as speculation that a Euro-Zone composite index for manufacturing and services sector will be at 46.6 this month and another report from Markit and HSBC for China Manufacturing will indicate a reading of 47.6 spurred concerns that global manufacturing is declining. The New Zealand dollar decreased after a report from Statistics Bureau indicated that current account deficit was at 4.9 percent of the country’s GDP less than the market expectation on 5.2.

The Australian dollar declined by 0.3 percent against the US dollar to trade at $1.0430 from its yesterday’s rate of $1.0457. the New Zealand currency was slightly changed against the dollar, exchanging at 82.64 US Cents down from 82.72 cents yesterday.

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