Dollar rebounds

 

arrow, dollar, moneyThe Australian dollar has rebounded after concerns over emerging markets sent the currency below 87 US cents over the weekend.

At 0700 AEDT on Monday, the Australian dollar was trading at 87.71 US cents, up from 87.68 cents on Friday.

The Australian dollar fell as low as 86.99 US cents on Saturday amid concern over emerging markets.

But the currency bounced back after China’s official manufacturing sector gauge came out in line with expectations at 50.5 in January.

Although it was a five month low, the figure was better than last week’s HSBC purchasing managers’ index (PMI), which showed manufacturing activity fell to 49.5 – below the 50 level that separates expansion from contraction.

“I think the Aussie dollar’s fall was representative of a broader deterioration in risk sentiment on Friday,” Bank of New Zealand strategist Kymberly Martin said.

“We had a continuation of concern focused on emerging markets and emerging market currency volatility.

“But the PMI was pretty solid and that probably helped to soothe some concerns around Chinese growth.”

AAP

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