Aussie slips ahead of Chinese data

The Australian dollar has lost ground versus the US dollar ahead of the Chinese manufacturing purchasing managers' index (PMI) report.

The Aussie is trading down 0.1% at $0.9431, because traders are cautious ahead of the HSBC China PMI on Monday. China is the main destination for minerals exported from Australia, so the level of manufacturing activity in China is key for the Australian economy. The report came in at 50.1 in August. Any reading above 50.0 indicates an expansion, and if the September report is also strong we could see the aussie dollar move towards the $0.95 level.

The Aussie had been boosted by the US Federal Reserve's decision to keep US monetary policy unchanged instead of trimming the bond buying scheme as expected. In response, dealers bought the Australian currency and sold the US dollar, as the Fed’s policy keeps the US dollar in a relatively weak position. 

 

Spot FX AUD/USD chart

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