Aussie Declines To 5-day Low Against Canadian Dollar
Monday morning in Asia, the Aussie fell to a 5-day low against the Canadian dollar as Australia’s manufacturing PMI contracted in December. The aussie also showed slight weakness against the greenback and the yen and it eased from near a 2-year high against the euro.
The performance of manufacturing index fell 2.7 points from November to 48.5, according to an Australian Industry Group and PricewaterhouseCoopers survey released in Canberra today.
A reading below 50 signals manufacturing is shrinking and may give central bank Governor Glenn Stevens scope to slow the pace of future interest-rate increases after he raised the benchmark lending rate on December 1 for a record third straight month. Paper, printing, publishing and food companies reported a decline in production, today’s report said.
December’s index “confirms that the recent recovery remains patchy,” said AIG Group Chief Executive Heather Ridout. “The improvement in new orders, which had driven stronger production, has tailed off.”
During early Asian deals on Monday, the Australian dollar weakened against the Canadian dollar. As of now, the aussie-loonie pair is trading at a 5-day low of 0.9372 with 0.924 seen as the next target level.
The Australian dollar that soared to near a 2-year high of 1.5911 against the euro at 5:15 pm ET Sunday eased thereafter. As of now, the euro-aussie pair is worth 1.5953. If the aussie weakens further, it may target the 1.606 level.
In early Asian deals on Monday, the Australian dollar slipped slightly against the currencies of U.S. and Japan. Around 8:40 pm ET, the aussie touched lows of 0.8941 against the greenback and 83.17 against the yen. The next downside target level for the Aussie is seen at 82.0 against the yen and 0.890 against the greenback. As of now, the aussie is worth 0.8966 against the US currency and 83.26 against the Japanese unit.
Traders are now likely to focus on the European session, in which the final manufacturing PMI reports from the major European economies, Euro-zone sentix investor confidence and the Italian preliminary CPI- all for the month of December are expected.
Across the Atlantic, the U.S. ISM manufacturing data for December and the construction spending for November have been slated for release.
