China’s Manufacturing Purchasing Managers’ Index (PMI) increased to 51.2 in September, up from 50.5 in August, beating expectations of 50.3. In contrast, the Services PMI slightly declined to 52.9 from 53, falling short of the forecasted 52.3. The Australian Dollar (AUD) responded to this PMI data by gaining modestly, with the AUD/USD rising by 0.05% to 0.6580. The AUD also showed strength against the Euro, emerging as a strong currency among major currencies.

Importance Of Independent Research

The article emphasizes the need for independent research before making investment decisions. It warns about the risks of investing, including the possibility of losing the principal amount. Trading foreign exchange on margin carries significant risk due to high leverage, which can be unfavorable for traders. The article advises consulting independent financial advisors to grasp the risks associated with foreign exchange trading. The author and FXStreet accept no responsibility for errors or financial losses that may occur and clarify that the opinions shared are those of the authors. Recent data from China on September 30, 2025, points to a stronger manufacturing sector, a positive indication for industrial demand. The Manufacturing PMI exceeded forecasts, suggesting the Chinese economy might be gaining momentum. This development could inspire confidence in assets linked to Chinese growth.

Market Opportunities And Risks

With this in mind, we should consider investing in the Australian dollar, which typically aligns with China’s economic performance. The initial reaction was small, but the underlying strength in manufacturing could benefit the AUD in the upcoming weeks. Options traders may explore call spreads on the AUD/USD to gain potential upside while minimizing costs, particularly since the currency is currently at 0.6580. This information is crucial in light of the economic slowdown fears that marked discussions throughout 2024. A continued recovery in China’s manufacturing sector would likely boost demand for industrial commodities like copper and iron ore. We can expect renewed interest in long positions on futures for these commodities, as their prices have historically correlated strongly with Chinese PMI results. The broader market environment supports risk-taking, fueled by a relaxed stance from the US Federal Reserve and concerns about a US government shutdown putting pressure on the dollar. This situation makes non-dollar currencies and commodities more appealing. A weaker dollar could amplify gains in commodity prices driven by demand from China. The Reserve Bank of Australia is anticipated to maintain its current policy, which creates a stable, if not thrilling, domestic landscape for the AUD. Compared to the uncertainty surrounding US fiscal policy, the AUD looks relatively promising. We could consider going long on the AUD against the USD, using derivatives to manage risks around crucial data releases like the upcoming US Non-Farm Payrolls. Create your live VT Markets account and start trading now.

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