Markets saw plenty of action overnight, as yesterday slide lower on unexpected contraction in Chinese manufacturing continued offshore.
The data printed at 49.6 versus expectations of 50.3, a 6 month low in that particular reading. Any number below 50 indicates contraction in activity. Importantly for both China and the global economy, new export orders were sharply lower.
While the data suggests potentially flagging global growth, some analysts have expressed reluctance to take it at face value, particularly given that it comes just ahead of Chinese New Year, when activity is less representative of the broader picture.
Unsurprisingly, the AUD was hit particularly hard on the news, and US stock indices are all around 1% lower on the day. By contrast, Gold rallied 2% to 2 month highs.
Current indicative levels: NZDUSD 0.8750 NZDAUD 0.9470 NZDEUR 0.6060 NZDJPY 85.60 NZDGBP 0.4990
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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