AUD/JPY rises above 94.00 following PMI data from both countries

AUD/JPY gains momentum as Australia’s Judo Bank Manufacturing PMI climbs to 52.6 in March from 50.4 in February.
The Australian Dollar strengthens on expectations that the Reserve Bank of Australia will keep interest rates unchanged in April.
The Japanese Yen weakens as disappointing Jibun Bank PMI data weighs on sentiment.

Akhtar Faruqui FXStreet

AUD/JPY halts its four-day losing streak, trading near 94.20 during early European hours on Monday. The currency cross gains as the Australian Dollar (AUD) strengthens following the release of upbeat preliminary Judo Bank PMI data.

Australia’s Judo Bank Manufacturing PMI rose to 52.6 in March from 50.4 in February, while the Services PMI improved to 51.2 from 50.8. The Composite PMI also climbed to 51.3, up from 50.6 previously.

The AUD gains further traction amid expectations that the Reserve Bank of Australia (RBA) will hold interest rates steady in April after cutting borrowing costs for the first time in four years in February. Additionally, optimism surrounding potential Chinese stimulus supports the Australian economy, given the close trade relationship between the two nations.

The AUD/JPY cross also benefits from improved risk sentiment as the White House revises its tariff strategy ahead of the April 2 implementation, according to the Wall Street Journal. Geopolitical tensions have eased, with Ukrainian and US officials meeting in Riyadh on Sunday to discuss peace efforts, while President Trump continues to push for an end to the three-year war.

Additionally, the AUD/JPY cross appreciates as the Japanese Yen (JPY) remains under pressure as weaker-than-expected PMI data offsets the Bank of Japan’s (BoJ) hawkish stance. Japan’s Jibun Bank Services PMI declined to 49.5 in March from February’s six-month high of 53.7, marking its first contraction since October and the sharpest drop in nine months.

Meanwhile, the Manufacturing PMI slipped to 48.3 in March from 49.0 in February, missing expectations of 49.2 and extending its contraction streak to nine consecutive months. The Composite PMI also fell, dropping from 52.0 in February to 48.5 in March. Investors now await preliminary PMI figures for the Eurozone and Germany, due later in the day.

Economic Indicator

Judo Bank Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for AUD.

EUR/USD remains offered, challenges the 200-day SMA

EUR/USD adds to the current leg lower and comes just pips away from its significant 200-day SMA around 1.1580 as the NA session draws to a close on Thursday. The deeper drop comes in response to the intense advance in the Greenback, this time propped up by firm US data and higher US Treasury yields.

GBP/USD drops to four-week lows near 1.3360

Moving in step with other risk-sensitive peers, GBP/USD is attracting heavier selling and has slipped below the key 1.3400 support on Thursday to hit fresh four-week troughs. Cable’s decline reflects a firmer US Dollar as investors keep evaluating the latest batch of US data.

Gold remains offered just above $4,600

Gold is giving back part of its recent strong run, managing to bounce off earlier lows and reclaim the area beyond the $4,600 mark per troy ounce on Thursday. The pullback comes as the Greenback regains traction, Treasury yields move higher, and some profit-taking kicks in.