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Australian Dollar Down On China PMI, U.S. Fiscal Woes

The Australian dollar declined against most major currencies in Asian morning deals on Monday as weaker-than-estimated China manufacturing activity expansion in September and the possibility of U.S. government shutdown hurt investor sentiment.

An indicator of manufacturing activity in China increased less than previously estimated in September, detailed results of a survey by HSBC and Markit Economics revealed today.

The final purchasing managers' index edged up to 50.2 in September from 50.1 in August. The reading was below the flash estimate of 51.2.

Over the weekend, the House of Representatives voted 231-192 to avert a government shutdown on October 1, but delayed key parts of President Barack Obama's landmark healthcare law for a year as part of an emergency spending bill. With Senate leaders planning to reject the House bill and the White House issuing a veto threat, a government shutdown appears inevitable.

In economic news, Australia's consumer prices are expected to have risen 2.1 percent on year in September, the latest inflation gauge from TD Securities and the Melbourne Institute revealed today.

That held steady from the gauge's reading for August.

The aussie touched 0.9282 against the greenback for the first time since September 12. This is down by 0.4 percent from last week's closing quote of 0.9317. The aussie may probably test support at the 0.92 level.

The aussie fell to near a 3-week low of 0.9573 against the loonie, lower than Friday's closing value of 0.9603. The next support for the aussie lies at the 0.95 level.

The aussie that ended Friday's trading at 1.1259 against the kiwi fell to a weekly low of 1.1223. If the aussie continues its slide, it may find support at the 1.11 level.

The aussie reached 90.74 against the yen, a level unseen since September 6. Further bearish trend may see the aussie facing support at the 90.00 area. At last week's close, the pair was worth 91.54.

Industrial output in Japan contracted a seasonally adjusted 0.7 percent in August compared to the previous month, the Ministry of Economy, Trade and Industry said today.

That missed forecasts for a decline of 0.3 percent following the 3.4 percent jump in July.

At 1:00 am ET, Japan housing starts data for August is due.

German retail sales for August and Eurozone advanced CPI for September are set for release in the European session.

Canada GDP data for July and industrial product price index for August are due in the New York session.

by RTTNews Staff Writer

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