Improved Chinese data boosts commodity currencies
Overnight data from China came in slightly better than expected. China’s official PMI rose from 49.7 to 49.8 against an expectation of a drop to 49.6. Although not yet above the 50 level, which is the dividing line between contraction and expansion, it was still enough to cheer stock markets and help commodity currencies gain some ground. Positive housing data also supported the Aussie and the Kiwi which have both retreated from multi-year highs versus the Pound.
It's the beginning of a new month so as usual we await purchasing managers indices (PMI's) from the UK. Manufacturing in the UK is likely to have remained positive and that should be enough to keep the Pound supported above the important technical level of 1.5090. We also get a raft of PMI releases from the Eurozone, but this is unlikely to trouble markets.
In the United States it was reported that job growth had climbed to a three month high as the economy managed to create 200,000 new jobs in September. The US is continuing to produce jobs at a consistent pace despite recent losses in the energy sector and at this pace full employment is not far away. This was undoubtedly good news and the dollar remains well supported. This bodes well for tomorrow's non-farm payroll report , another solid number will see the dollar continue the recent rally.