Release Explanation: The Australian AIG Index (services and manufacturing) is a seasonally adjusted composite index based on the diffusion indexes for production, new orders, deliveries, inventories and employment. Each category has its own weight correspondent to its effect on the economy. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. The distance from 50 is indicative of the strength of the expansion or decline.
Trade Desk Thoughts: The Australian AIG services sector activity declined again during the month, although the rate of decline has eased slightly. The index rose by 3.4 points to a 35.6. This is the twelfth consecutive reading below the crucial 50 level which denotes contraction for the country. The Australian government has issued a second stimulus package which is expected to be paid out in the coming weeks. The package is worth A$900 to lower and middle income earners.
Forex Technical Reaction: The aussie has not reacted significantly from this release. Price is slightly below the previous days R2 level at .7170.