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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Australian dollar is growing
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The Australian dollar is growing

The AUD/USD pair maintains its growing momentum, relying on good Chinese statistics and neutral data on retail sales in Australia.

The Australian dollar rises in price in tandem with its US counterpart, for the third day in a row. Currently the AUD/USD pair is trading around the 0.7210 mark.

In the morning, China has published statistics on the activity index of purchasing managers in October. The indicator from Caixin Media, designed together with the Markit agency, grew in the last month and amounted to 52.0 points against the previous level of 50.5 points. Thus, the PMI index departed from its fourteen months low and recovered. Naturally, at a value of 50.5 points (September), it was premature to talk about any noticeable decline since the 50 point level remained untouched. However, any fact of reduction is now perceived by Chinese investors very sensitively.

By the way, today’s published statistics do not coincide with the official data of the Chinese PMI. There is a noticeable positive, while the National Bureau of Statistics of China saw a drop to lows of almost seven years. Both releases came out with a difference of four days, but their conclusions are opposite. In this light we should be wary of figures from Caixin, especially if they are singular.

Australia presented statistics on September retail sales. The index added 0.4%, taking into account the seasonal factor. Overall, the third quarter of Australian retail sales strengthened by 0.6%, slightly weaker than the index for the second quarter of this year (0.7%).

Details of the report show that in the last month the sales of clothing and footwear (1.0%) have significantly increased, and sales in restaurants and cafes (0.9%) have risen – most likely due to the seasonal factor.

Despite some quarterly reduction, retail sales are estimated positively. This observation is quite similar to the comments of the Reserve Bank of Australia, voiced yesterday. They talked about maintaining the momentum of growth in the Australian economy. Rising retail sales are a good illustration of this conclusion.

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