China’s COVID Cases Worsens Low Manufacturing Rates
The AUD/USD currency pair is staying strong in the short term close to the 0.7480 area even though the market bias is in favor of bearish traders as the price is sitting under 0.75.
Whereas, reports coming in from China are not making a successful attempt at moving the needle in much significance while traders in the North American market are getting ready for the Non-farm payroll report. With a 0.7485 mark, the price nibs at the green area and it sticks within the range of 0.7477 and 0.7500 for now.
AUD/USD price chart. Source TradingView
The Chinese Caixin manufacturing sector Purchasing Managers’ Index for the month of March came in at 48.1 against the initially speculated figure of 49.7 and that of the month of February which came in at 50.4. This shows the deteriorative state of business conditions in the country as a result of the latest outbreak of COVID starting last month.
Before that, the index of purchasing managers for the manufacturing sector in China ended up being 49.5 for the month of March whereas it was 50.2 recorded in February versus 49.9 which was expected, according to the country’s statistics bureau on Thursday.
Nevertheless, more attention has also been given to the ongoing crisis between Russia and Ukraine as there is no encouraging news coming from their peace talks. The US dollar had more gain on Thursday since a lack of resolution in the diplomatic efforts increased demands for the US dollar as a safe-haven asset. Further peace talks commence on Friday.
Non-farm Payroll Numbers to Come In
In addition, the monthly and quarterly end flow is causing more volatility in the financial market but trade might take a low turn as the American Non-farm Payroll numbers are expected to be turned in, according to the Chief Forex Strategist with Scotiabank, Shaun Osborne.
The non-farm payroll is said to keep on reflecting a healthy gain in the growth of employment numbers in the month of March while the rate on unemployment figures is expected to be lower. Financial analysts with Westpac are of the opinion that the labor market which has a history of being tight is expected to keep supporting hourly earnings on average.
But analysts with ANZ Bank are of the opinion that with the strength shown by the labor market, the Federal Reserve’s expectation that inflation will swiftly reduce to average levels by 2023 might be an optimistic venture.