BLBG:Aussie Dollar Holds Gain on Data Signaling China Manufacturing Expansion
The Australian dollar maintained a one-day gain from yesterday after a report showed manufacturing unexpectedly expanded last month in China, the South Pacific nation’s biggest trading partner.
The so-called Aussie was supported after a purchasing managers’ index for Chinese manufacturing rose to 50.5 from 50.3 in December, above the level of 50 that marks the division between contraction and expansion. New Zealand’s dollar, nicknamed the kiwi, slid as Asian stocks pared earlier gains.
“The knee-jerk reaction to the Chinese data was very positive,” said Callum Henderson, global head of foreign- exchange research in Singapore at Standard Chartered Plc. “The fact that it’s still an expansion is positive for higher beta currencies, particularly the Aussie.”
Australia’s dollar was little changed at $1.0612 as of 2:25 p.m. in Sydney after gaining 0.2 percent yesterday. The Aussie traded at 80.86 yen from 81. New Zealand’s currency fell 0.3 percent to 82.40 U.S. cents. The kiwi dropped 0.4 percent to 62.78 yen.
Australian 10-year bonds rose, pushing yields down four basis points, or 0.04 percentage point, to 3.68 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, climbed 1 1/2 basis points to 2.745 percent.
The MSCI Asia Pacific Index (DMXAP) of shares advanced 0.2 percent.
China Policy Outlook
The reading for China’s manufacturing gauge compares with a median estimate of 49.6 in a Bloomberg News survey of economists. The People’s Bank of China injected 477 billion yuan ($75.7 billion) last month through Jan. 19, the most since Bloomberg began collecting the figures in March 2008.
Standard Chartered’s Henderson said he’s “relatively bearish” on the Aussie for the first half of this year.
China’s “good data will only exacerbate the gradualism of policy easing,” he said. “At some stage that may be a negative for markets.”
A report today showed Australian house prices plunged by the most on record in 2011 as global economic uncertainty and concerns about its impact at home kept a lid on demand.
To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
