On Monday, the Australian Dollar rose to 104.07 US cents from the last Friday’s 103.95 cents. This was after the markets digested better than what was expected from the Chinese manufacturing data as well as from weak domestic building approval figures.

According to Andrew Salter, ANZ foreign exchange strategist, the strengthening of the Australian dollar is due to Asian market’s positive reaction to Chinese manufacturing data. As data reveal, China’s manufacturing has continuously expanded in March as opposed to what economist expected it to be.

"The Aussie dollar rose sharply early in the Asian session. But we've unwound some of those gains later this session,” Mr. Salter said.

"It's unclear whether what we are seeing here actually signals growth or whether we are just seeing statistical noise," Mr. Salter added.

However, on the other hand, a 7.8 percent fall in building approvals in February was noted in the data of the Australian Bureau of Statistics. Mr. Salter is also quick to state that the movement of the currency this coming Tuesday will greatly be affected by the board meeting of the Reserve Bank of Australia.

"If there is a rate cut, the Aussie dollar will certainly fall,” said Mr. Salter.

Also, on Monday, the Australian bond future prices were pushed lower by the Chinese manufacturing data. The market has been kept week over the weekend because of a strong reading coming from the Chinese purchasing managers’ index or PMI. This is according to ANZ Senior rates strategist, Tony Morriss.

"Bond prices have been lower, very much in reaction to the Chinese official PMI data, which was much stronger than expected," said Tony Morriss.


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