While investors are waiting for the Caixin manufacturing PMI tomorrow, the Australian dollar kept gaining in Asia. The AUD/USD is trading at 0.7614, up by 0.16%, as USD/JPY traded at 106.50, up by 0.05%.
The closely-monitored Caixin manufacturing PMI for April will be reported on Tuesday. Previously, it came at 49.7.
The NAB business confidence came in earlier on Monday at plus-5, which was plus-6 last month. The business survey, on the other hand, shows a plus-9 from plus-12 last March. This implies that the economy is gearing towards the non-mining industry; however, the exchange rate remains.
“However, subdued inflation pressures in the survey and a very weak CPI result for Q1 suggest the RBA has scope to further cement the non-mining recovery with an additional cut to the cash rate at tomorrow’s (Tuesday) meeting, although it is likely to be a close call,” said Alan Oster, the Chief Economist of NAB.
For the month of April, the manufacturing PMI of Japan was at 48.2, above the expected 48.0. Meanwhile the manufacturing index of Australia’s AIG is at 53.4, a large drop from the 58.1 index last month.
The Reserve Bank of Australia will be meeting on Tuesday in what is said to be a close decision as they expect the cash rate to be left on hold. The 25 basis point rate cut was made last week after the consumer price index inflation last week.
“While margins remain tight, recovering domestic market share and building momentum in a variety of export markets provide a strong foundation for the lift in confidence required for the sector to move up another gear. A budget that boosts incentives for business investment and innovation would come at just the right time for manufacturers to capitalize on recent gains,” says Innes Willox, the Chief Executive of AI Group.
During the weekend, the CFLP manufacturing index of China in April was below their expectations, coming in at 50.1, but there is still hope for expansion territory. The CFLP service PMI, on the other hand, had eased down to 53.5 from 53.8.
The USD index, on the other hand, was down by 0.13% to 92/90 against a basket of 6 major currencies. In the coming days, investors are paying attention to the US jobs report for April, particularly for changes in wage growth. Data on Thursday showed that the US economy have grown to its slowest rate in 2 years, having only a 0.5% increase in GDP.