Yesterday morning the AUD fell dramatically at open of market. This was a result of declining Chinese manufacturing data out over the weekend.
The market was expecting the Manufacturing PMI data to be released at 51.1 as it has been around that figure for the last 5 months. The market release was 50.8; this is a considerable fall for typical Chinese manufacturing data release. Unfortunately the market was closed at the time so the FX rate remained unchanged until Monday morning. As mentioned above the AUD/USD fell around 50 points upon open, which has now pushed the AUDUSD FX rate below the 0.86 mark.
Heading into Monday, domestic Australian data provided even less support for the AUD. This data came from the monthly building approvals and job advertisement data. The building approvals came in far below expectations of -0.9%; at -11%. This decline was the worst in almost 24 months, and the market’s response was to push the AUD further in to the ground. Job advertisements were also down yesterday as the previous figure sat on 0.8%; this month landing on 0.2%.
Today we are expecting a negative figure out on the Australian Trade balance, market analysts are expecting a figure of -1.7 Billion for the month of October. The Cash Rate decision this month is not expected to deviate from the consistent 2.5%. Finally, Glenn Stevens is expected to make an announcement at 1.30 after the Interest Rate announcement has been made. This will probably create some short term volatility depending on the words spoken.