China's Caixin Manufacturing PMI unexpectedly expands to 51.0 in August vs. 49.3 expected

Dhwani Mehta FXStreet

According to the latest data published on Friday, China's Caixin Manufacturing Purchasing Managers' Index (PMI) jumped back into the expansion territory, coming in at 51.0 in August when compared to July’s contraction of 49.2. The data surprised the market to the upside, as they had expected a 49.3 reading.

Key highlights (via Caixin)

Operating conditions improve for manufacturers in August.

Fresh increases in output and new business.

Employment returns to growth.

Input costs rise for first time since February.

"The slight rise in prices buffered the pressure of deflation, logistics remained smooth, inventory of raw materials fell, and manufacturers held on to their optimism, although to a limited extent," said Wang Zhe, an economist at Caixin Insight Group.

"Looking ahead, seasonal impacts will gradually subside, but the problem of insufficient internal demand and weak expectations may form a vicious cycle for a longer period of time," Wang added.

On Thursday, China’s National Bureau of Statistics (NBS) released the country’s official Manufacturing Purchasing Managers' Index (PMI), which improved to 49.7 in August as against the 49.3 contraction in July. The market consensus was for a 49.4 figure.

AUD/USD reaction

The upbeat print of the Chinese Manufacturing PMI fails to impress the Aussie Dollar, as AUD/USD is keeping its range at around 0.6480, almost unchanged on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits the key Fed verdict

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold struggles below $4,300 as Fed decision looms

Gold remains depressed below $4,300 in the Asian session on Wednesday as traders look to the crucial Fed decision for a fresh impetus. Meanwhile, a surge in US bond yields, bolstered by oil-driven inflation fears, continues to weigh on the non-yielding bullion. Furthermore, escalating Middle East tensions underpin the safe-haven US Dollar and act as a headwind for XAU/USD.

Ethereum continues to attract capital despite impending rate hike and Clarity Act failure

Ethereum declined to $2,400 on Tuesday after the Clarity Act failed to progress in the Senate. Despite that and the market's near certainty of an interest rate hike at the next Federal Reserve (Fed) meeting, the top altcoin has continued to attract fresh capital. Ethereum buyers have been dominating sellers over the past few days.

August UK inflation report expected to show rising inflation

The United Kingdom Office for National Statistics will publish the highly anticipated Consumer Price Index data for August on Wednesday at 06:00 GMT. The inflation report could trigger volatility in the British Pound, as it comes just one day before the Bank of England monetary policy decision.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.