Release Explanation: The Australian AIG Manufacturing 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.
The release is a closely watched figure for signs of future economic growth. Stronger numbers may lead to revaluations of a stronger currency and vice versa. Currency markets can swing confidently on this release.
Trade Desk Thoughts: The manufacturing sector in Australia has increased slightly by 1.7 points to 33.4 in March from the previous reading of 31.7 in February. The slump was seen across all sectors and in most states. This is the tenth consecutive month that the index has come in under the crucial 50 level which denotes expansion from contraction. Production, capacity utilization, and exports remain low while new orders rose 3.3 points to 31.4. Even though this is still below the 50 level it could provide a firm bottom on which the economy can recover.
Forex Technical Reaction: The aussie is currently trading at .6915 which is just above the neutral pivot point but roughly 50 pips off the high achieved in trade the previous day.