Australian Dollar Rises Ahead of Interest Rate Decision

Global stocks rose today as investors cheered positive data from Asia, Europe, and the United States. On Saturday, data from China Logistics showed that China’s manufacturing PMI reached 50 in November. This was the first time the sector expanded since April this year. This growth was confirmed after Caixin said the PMI expanded to 51.8. Meanwhile, PMI data from Germany and the European Union was positive. The market also cheered the increase in sales during the Thanksgiving / Black Friday weekend. They also reacted positively to China’s reaction to Trump’s decision to sign two bills supporting Hong Kong. The retaliation was not as strong as what the market was expecting. In Europe, the DAX and Stoxx rose by 90 and 17 points respectively. In Asia, the Hang Seng and China A50 rose by 98 and 20 units respectively. In the United States, the Nasdaq and Dow 30 rose by 20 and 95 points respectively.

The Australian dollar rose today in reaction to positive data from China. It is also a day before the Australian central bank is set to release the interest rates decision. Data from the country was weak. The AIG manufacturing index declined from 51.6 in October to 48.1 in November. Export prices in the third quarter dropped to 1.9% from the previous 3.4%. Export volume declined by -4.6% after declining by -2.6% in the second quarter. Terms of trade index rose from 1.6% to 1.9%. Private house approvals declined by -7.0% while company profits declined by -0.7%. These numbers show that the central bank will have a tough decision tomorrow.

The euro was little moved today as the market waits for the first major speech by Christine Lagarde, the new ECB president. The market will be keen to hear her comments on the European economy. She has previously called on European countries, particularly Germany, to increase its government spending. The PMI data released today were mixed. In Germany, the manufacturing PMI rose to 44.1 from the previous 43.8. This was the third straight month of gains. In the European Union, the manufacturing PMI rose from 46.6 to 46.9. In the UK, manufacturing PMI rose from 48.3 to 48.9.

EUR/USD 

The EUR/USD pair was unchanged today as the market waited for a speech by Christine Lagarde. The pair is trading at 1.1015, which is slightly below Friday’s high of 1.1028. The price is slightly above the 23.6% Fibonacci Retracement level of 1.1000. This consolidation means that the pair is trading along the short and medium-term moving averages. This means that a breakout in either direction is possible during the American session.

AUD/USD

The AUD/USD pair rose to an intraday high of 0.6788 today. This was a significant gain from Friday’s low of 0.6752. The price is slightly below the 50% Fibonacci Retracement level. The short and medium-term moving averages are making a bullish crossover while the RSI has been moving upwards. The pair may continue to move upwards. The important level to watch will be the 50% Fibonacci level of 0.6800.

NAS100

The Nasdaq index futures rose today ahead of important earnings from technology stocks like Slack and Docusign. The index pared back some of these gains after Trump announced new steel and aluminium tariffs from Argentina and Brazil. The index is now trading at $8420, which is lower than Friday’s high of $8454. On Friday, the pair formed a double top pattern. This implies that the index may see some significant declines in the next few days. This is being supported by the current crossover of the 14-day and 28-day moving averages.