Short term strength for the Aussie Dollar
2 June, 2015
The new month got underway yesterday with the usual string of PMI data to start us off. Manufacturing PMI was the focus of the morning with individual European countries such as Spain, Italy and France all impressing with better than expected figures. Germany however saw a slight slowdown which contributed to the overall Euro-zone figure dropping from 52.3 to 52.2. The was not however big enough of a difference to effect the markets with other major factors currently driving sentiment.
The UK shortly followed with another shy figure, posting a result of 52 against expectation of 52.5, although still a very small improvement from April. The markets did take these figures into affect as the pound slid marginally against most major currencies. The afternoon was all about the US which produced another mixed bag with inflation slightly lower than expected, subsequently weakening the dollar, but soon after positive Manufacturing data recovered these losses with May’s figure improved to 52.8 from 51.5 in April. The dollar enjoyed another good day by close of business, a trend that could well continue whilst uncertainty surrounds the Euro-zone.
Overnight the Royal Bank of Australia held interest rates at 2% but this saw the Australian Dollar gain in value as markets had been in fear of another potential rate cut. This is likely to see short term strength for the Aussie Dollar having lost much of value in the last 2 months.
This morning we have Construction PMI for the UK and 9:30am with small improvement expected, whilst at 10am latest inflation figures for the Euro-zone could be key. Amongst a busy week of data, make sure you are in close contact with your broker to ensure you can take advantage of any opportunities that may present themselves.
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