Australian Dollar Strongest, Reaches Multi-Year Highs Despite Negative Economic Releases

The Australian dollar traded as the strongest currency on the Forex market today as the market sentiment favored riskier commodity-geared currencies. That is despite Australia’s macroeconomic reports, which were rather bad.
Markit released preliminary PMI data for this month on Friday. It showed that the manufacturing Purchasing Managers’ Index fell from 57.2 in January to 56.6 in February. The services PMI dropped from 55.6 to 54.1. Despite the negative readings, Andrew Harker, Economics Director at IHS Markit, had some positive things to say:

A key positive from the flash PMI data for Australia is the strongest pace of job creation since late-2018. This was a response not only to sustained growth of new orders, but also signs of capacity pressures returning and greater confidence in the future outlook.

Obviously, there were negatives as well, including the fact that “growth in the economy has been accompanied by stronger inflationary pressures” and “this has the potential to limit the pace of the recovery going forward”. And of course, the COVID-19 pandemic continued to have a negative impact:

Another factor potentially putting the brakes on growth, particularly in the manufacturing sector, is the ongoing disruption to supply chains amid global shipping problems which showed no sign of letting up. Supplier lead times lengthened to the greatest extent in three months in February.

Meanwhile, the Australian Bureau of Statistics reported that retail sales rose by 0.6% in January according to the preliminary estimate. While it was a definitely better reading than a drop of 4.1% regisetered in December, the increase was far smaller than the 2.1% predicted by experts.
AUD/USD surged from 0.7767 to 0.7858 as of 13:43 GMT today, trading near the highest level since March 2018. EUR/AUD sank from 1.5564 to 1.5433 — the lowest since December 2018. AUD/JPY jumped from 82.08 to 82.85, and it was at the highest level since December 2018.
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Original from: www.earnforex.com