Once again, the publication of strong economic data from China has cheered the financial markets. Caixin's business service index (PMI) March values announced today showed markedly greater growth than was predicted.
It seems that the incentive measures renewed by the Chinese authorities to support the national economy have borne fruit. How long will they turn out to be? Time will tell but for now, the markets have responded positively to Caixin PMI data published today, which showed an increase of 54.4 points in March against the 51.1 point in February with the increase forecast of 52.3 points. On this wave, equity markets in the Asia-Pacific region traded in positive territory. Such positive sentiment will most likely be passed on to trading floors in Europe. In any case, futures on European stock indices show a strong positive trend.
But on Tuesday, the mood of American investors was crumpled against the background of the publication of economic statistics from the United States, which also manifested itself in strengthening the US dollar as a safe-haven currency. Basic orders for durable goods rose less than expected, just adding 0.1% in February against expectations of a 0.3% increase and a 0.1% decrease in January.
Back at the present time, the Chinese positive will overwhelm yesterday's negative from the American, especially the markets psychologically very much want everything to go back to normal so that global economic growth continues against the backdrop of the restoration of China and the United States in China, which would allow investors to continue on the wave the remaining high volumes of liquidity to buy and buy risky assets. Likely, it will happen later.
In the wake of the likely positive sentiment today, we expect that the US dollar will remain under pressure, primarily against commodity and commodity currencies. This was supported by rising crude oil prices and rising demand for risky asset.
Forecast of the day:
The AUD/USD pair remains in the range of 0.7055-0.7145 while it returns to its upper boundary against the background of strong economic statistics from the United States. If the pair holds above the level of 0.7100, it can continue to rise to 0.7145.
The USD/CAD pair resumed its decline in the wake of the strengthening of crude oil prices and overall positive markets. We consider it possible to sell the pair with the target of 1.3250 if it overcomes the mark of 1.3300.
