AUD/USD recovers above 0.6200 on upbeat China PMI data
The AUD/USD pair recovered from a dip near 0.6215, snapping a six-day losing streak during the early Asian session on Monday (3/3). Upbeat Chinese economic data provided some support to the pair. On Monday, China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) for February will be in the spotlight.
China’s PMI returned to positive territory in February as the country stepped up measures to boost its economy. Data released by the China Federation of Logistics and Purchasing (CFLP) on Saturday showed that the country’s NBS Manufacturing PMI improved to 50.2 in February compared to 49.1 previously. This reading was stronger than the expected reading of 49.9. Meanwhile, the NBS Non-Manufacturing PMI rose to 50.4 in February from 50.2 in January, beating estimates of 50.3.
Upbeat Chinese PMI report has boosted the Australian dollar (AUD) as a substitute for the Chinese currency as China is Australia’s top trading partner. However, tariffs imposed by the United States threaten to overshadow the manufacturing recovery and may cap AUD gains.
US President Donald Trump said that an additional 10% tariff will be imposed on Chinese imports starting Tuesday, which is a combination of the initial 10% tariffs that came into effect last month. The escalating trade tensions between the US and China could boost safe-haven inflows and benefit the US Dollar (USD) in the near term.
Source: FXStreet
