AiG Performance of Manufacturing Index 49.2 in May vs. 44.8 in April
PMI Data Shows 7th Consecutive Contraction in Factory-Sector Activity
AUD/USD Declines, Looks Ahead to RBA Meeting and Key US Data
The Australian Dollar continued to edge lower against its US counterpart after the Australia Industry Group (AiG) reported that the manufacturing sector shrank for a seventh consecutive month in May. The AiG PMI gauge came in at 49.2, which was higher than the 44.8 reported in April but still below the 50 "boom-bust" level. A tightening federal budget and a strong Australian Dollar were cited as contributing to the continued weakness in manufacturing.
The data comes ahead of the RBA policy announcement where markets widely expect the central bank to maintain monetary policy unchanged and keep the lending rate at 2.50 percent. Currency Strategist Ilya Spivak cites the upcoming US data this week, including ISM and Non-Farm Payrolls,to be the key focus as markets look for signs that the Fed will continue itsasset tapering and planned rate hike.