The Aussie Dollar had a pretty poor November as it became increasingly clear the RBA was in no rush to raise interest rates against a background of pretty soft growth in wages and a generally benign picture on inflation.
The poor price action became somewhat self-reinforcing and on Thursday the AUD couldn’t rally even with a pretty solid set of Q3 capex numbers. It ended the month at USD0.7565 and GBP/AUD1.7880.
Overnight we’ve had an update on Australia’s manufacturing sector. AiG’s PMI jumped 6.2 points in November to 57.3 and the index has now held above 50 for 14 consecutive months, the longest continuous expansion since 2005.
All seven activity sub-indexes expanded in November, including very strong results for new orders and exports, two lead indicators that bode well on the outlook for activity levels in early 2018. By sector, the performance was not quite as spectacular with only five of eight industries expanding over the month.
The report noted, ““Participants said demand from residential construction was tailing off in November. Other participants noted stronger demand for equipment, machinery and other inputs or Government projects and procurement, agriculture, renewable energy projects and the local leisure market.”
AUD has pretty much flat-lined after the numbers, which itself is much-improved price action after a difficult month. Now let’s get on with the serious business of the second Ashes test starting tomorrow in Adelaide.