The Australian dollar gains 0.3% as China’s manufacturing PMI beats expectations, offsetting disappointing local economic data.
The Australian dollar (AUD) rose nearly 0.3% to approach 0.7200, defying weak domestic economic releases. The currency’s strength stems from China’s manufacturing sector, not Australia’s fundamentals, which showed declines in building permits, corporate profits, and a wider-than-expected current account deficit of A$27 billion.
April’s building permits fell 3.4% month-on-month, worse than the anticipated 1.5% drop, while Q1 company gross operating profits contracted 1.3% QoQ against a 0.5% consensus gain. The current account deficit also exceeded forecasts, reaching A$27 billion versus the expected A$23 billion.
China’s private manufacturing PMI for May printed at 51.8, slightly below April’s five-year high but above consensus, reinforcing the AUD’s role as a proxy for Chinese growth. However, the official NBS PMI remained at 50.0, signaling stagnation in state-owned factories.