Australian Dollar Stays Down Despite Better Construction PMI
- The pace of deceleration in Australia’s construction sector continues to fall
- December’s Performance of Construction Index came in at 47 vs. 46.6 prior
- However, AUD/USD remained stuck in its post-US payrolls data downtrend
News of continued slowing in the pace of deceleration in the construction sector did little to advance the cause of Aussie Dollar bulls as a new trading week got under way in Asia on Monday.
The Performance of Construction Index from the Australian Industry Group came in at 47 for December. This was an improvement from November’s 46.6 but still below the crucial 50 level, which would indicate an expansion in overall activity. The index is analogous to the Purchasing Managers’ Indexes released elsewhere around the world and has been improving for three straight months. Increases in residential construction have been offset by falls elsewherehowever, often as the Australian mining industry retrenches after years of expansion.
In any case, the Australian Dollar remained under pressure against the greenback. Friday’s US labor-market report showed underwhelming job creation but its news of stronger wage settlements kept the prospect of higher interest rates very much alive for global markets. This in turn has burnished the US Dollar’s luster once again, to the detriment of most major currencies.
The construction data are also likely to have been released into a rather thin market, with Japanese desks thinly staffed or absent altogether for a holiday on Monday. AUD/USD slipped to 0.72885 after the release, from 0.72913 just before it.
Trickling down: AUD/USD
Chart compiled using TradingView.
This is a pretty light week for scheduled Australian data, and US data for that matter, so it’s possible that the Australian Dollar fightback against its own “Trump trade” weakness could resume in time.