Australia’s main trading partner is China, who imports a significant percentage of their raw materials from the mining nation, fuelling economic growth. The concerns over a Chinese economic slowdown from its double digit growth are an important driver for the Aussie currency.
The HSBC China Manufacturing Purchasing Managers Index rose to 51.2 in September compared with a final reading of 50.1 in August.
"The HSBC Flash China Manufacturing PMI rose to a six-month high in September, adding further evidence to China's on-going growth rebound. The firmer footing was supported by simultaneous improvements of external and domestic demand conditions. We expect a more sustained recovery as the further filtering-through of fine-tuning measures should lift domestic demand. This will create more favourable conditions to push forward reforms, which should in turn boost mid- and long-term growth outlooks."
Following the release the AUD strengthened against its US counterpart:
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