- Sterling spikes as UK manufacturing sector rebounds in August
- China manufacturing index upbeat at 50.4
Overnight the Australian Dollar was supported on the back of firmer than expected manufacturing data from China. Chinese manufacturing purchasing indicators rose to 50.4 in August versus an expectation of only 50.0. The survey was upbeat in all areas and points to a healthy rebound in activity in the region. In theory this should assist the Australian Dollar as their economy is so dependent on China purchasing their raw materials. The Australian domestic economy, however is struggling with retail sales reported flat in July.
Sterling has rocketed this morning as manufacturing data in the UK also came in much stronger than anticipated. The UK seems to have shrugged off the impending Brexit as manufacturing PMI rose to 53.3 last month from 48.2 in July. This is a 10 month high and also the largest rise in the history of the data release. Much of the rise has been attributed to the weaker Pound as manufacturers cited an upswing in new export work. This is only the first in a series of releases so although welcome, it is a little too early to suggest that the UK is completely out of the woods. Analysts had only expected a rise to 49.0 and the Pound has bounced aggressively this morning.
The Dollar has been trading pretty fair across the board this week as markets begin to price in the risk of an interest rate hike from the Federal Reserve in September. Most analysts do not expect a move until the December meeting however recent hawkish rhetoric from a few Fed officials have lowered the odds on an earlier hike. Tomorrows Non-Farm payrolls release will be very closely watched. Another figure close to 300k will spur the Dollar bulls into action as trader bet that the Fed will move sooner rather than later.
What do you call bears with no ears?
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One looks at the other and says, “You know how to drive this thing?!”
I bought the world’s worst thesaurus yesterday.
Not only is it terrible, it’s terrible.
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Today's Major Economic Releases
||EU: Final manufacturing PMI
||UK: Manufacturing PMI
||US: Unemployment claims
||US: Revised non-farm productivity q/q
||US: Final manufacturing PMI
||US: ISM manufacturing PMI
FX Research by Ricky Nelson
Daily Currency Analysis with Charlie Horsley
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