AUD/USD: upward correction is still ongoing
The American dollar is strengthening today. However, the Australian dollar, which is also strengthening against the yen, pound and euro, continues to successfully resist it.
As the Australian Bureau of Statistics reported today, Australia's GDP in the 1st quarter of 2022 grew by +3.3% (in annual terms), slowing down from growth of +4.4% in the previous quarter, which, however, turned out to be better than the forecast for +3.0% growth. In quarter terms, the Australian economy slowed down from +3.6% to +0.8%, also slightly better than the forecast +0.7%. This is still positive data, indicating the continuation of the recovery of the Australian economy, albeit at a slightly slower pace. Despite the fact that the AiG manufacturing activity index fell sharply from 58.5 to 52.4 in May, the Australian dollar ignored the relative decline in data. A reading above 50 suggests picking up activity, while the Commonwealth Bank of Australia and S&P Global Manufacturing PMI also coming out last night at 55.7 (versus 55.3 in April). The manufacturing sector makes up a large share of the total Australian GDP, and the country has a highly developed mining sector. The PMI index in the manufacturing sector is an important indicator of business conditions and the economy as a whole. An indicator above 50 indicates an increase in activity. Its relative growth is also a positive factor for AUD.
At the time of publication of this article, the AUD/USD pair is traded near the 0.7195 mark, maintaining positive dynamics (within an upward correction) above the important short-term support levels 0.7138, 0.7124.
Today, AUD/USD volatility will rise again at 14:00 (GMT) when the US manufacturing business index (PMI) is released. This index (among other data) is published in the monthly report of the Institute of Supply Management (ISM) and is an important indicator of the state of the sector and the American economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous values of the indicator: 55.4 in April, 57.1 in March, 58.6 in February, 57.6 in January. Forecast for May: 54.5