The Australian dollar braces for a volatile session today

While global stock markets continue to yoyo from one day to the next, the same cannot be said for currency markets, particularly when talking about the Australian dollar. Despite a huge rally in European and US stocks overnight, it is currently trading where it closed Wednesday’s Asian session.

As of 8.30am the AUD/USD currently buys .7001, up fractionally from Wednesday’s closing level of .6980.

Being the start of the month, a period where the data calendar is at its busiest, it will likely be fundamental factors that drive movements in the Aussie today.

At the top of the agenda will be Chinese manufacturing PMI data for September which will be released at 11am AEST. The closely watched indicator on manufacturing conditions within the country is expected to contract at a faster pace in September with a reading of 49.6 expected.

Alongside the Chinese PMI report, markets will also have to digest a raft of manufacturing PMI gauges from around the region, including from Australia, while in Japan the latest quarterly Tankan survey will also be released.

“Today‚Äôs China PMIs risk disappointing and reversing some of AUD recent gains,” Joseph Capurso, senior currency strategist at CBA, said in a note released this morning.

While that creates downside risks, Capurso believes the Aussie dollar may be supported should Asian stock markets continue to rally in line with the increase seen in overnight trade.

In what will also contribute to thinner-than-normal market liquidity, Chinese and Hong Kong markets will be on holiday today.

The full Australian dollar scoreboard is found below.

  • AUD/USD 0.7001 , -0.0016 , -0.23%
  • AUD/JPY 83.93 , -0.16 , -0.19%
  • AUD/CNY 4.4496 , -0.0101 , -0.23%
  • AUD/EUR 0.6265 , -0.0013 , -0.21%
  • AUD/GBP 0.4628 , -0.0009 , -0.19%
  • AUD/NZD 1.0954 , -0.0015 , -0.14%

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