AUD - Australian Dollar

The Aussie kickstarted the first week of December with a rise of almost 1% to open this morning at 0.6823. After a lacklustre last week of November, the Aussie finally received some much-needed positivity by initially finding some support from Australia’s largest trading partner China. China’s Manufacturing PMI was released over the weekend and reported a better than expected result. Following the result, China also released the Caixin PMI which also came in above expectations. Overall, the Chinese manufacturing sector grew at its fastest pace since December 2016, which in turn, sent the Aussie upwards. Pushing the Aussie into overdrive however was a significant fall in the value of the Greenback. The United States dollar fell across the board after the US ISM manufacturing survey came in weaker than expected. With support from China and a fall in the USD, the Aussie had one of its best days over the last few weeks.

Moving into Tuesday, the Aussie now turns to the RBA for direction with the release of their cash rate decision and accompanying rate statement set for release at 2:30PM AEDT today. While the decision is widely expected to be a hold for December, the market will take keen interest in the rate statement for any insights into the RBA’s rate guidance.

Key Movers

A weaker than expected ISM Manufacturing Survey in the United States sent FX markets into overdrive as the Greenback fell significantly across the board. The ISM survey reported a reading of 48.1 against an expected 49.2, a large miss all in all. Despite the poor ISM survey result, there was a rise in the less followed US Final PMI survey to 52.6. Nevertheless, the US Dollar Index tumbled 0.45% to open this morning at 97.84.

Staying with the United States, the December 15th deadline continues to linger in the back of the markets mind with any news of the US-China trade war continuing to dominate market sentiment. Overnight, Wilbur Ross told Fox News that “if nothing happens between now and then, the President has made it quite clear he’ll put the tariffs in – the increased tariffs”. The adversarial mood did not help the tenuous situation.

Expected Ranges

AUD/CAD: 0.9034 - 0.9114 ▲

AUD/EUR: 0.6122 - 0.6186 ▼

GBP/AUD: 1.8929 - 1.9029 ▲

AUD/NZD: 1.0454 - 1.0524 ▼

AUD/USD: 0.6779 - 0.6848 ▲

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