The Australian S&P Global Manufacturing PMI rose from 51.6 to 52.2 in December. A PMI above 50 indicates growth in the manufacturing sector. This increase points to better economic conditions in Australia and may influence future monetary policy decisions.

Related Financial Updates

Several financial updates were shared, including currency movements and forecasts. Key focus areas included GBP/USD, NZD/USD, and AUD/USD, related to various economic reports like the US Nonfarm Payrolls. Other topics included gold prices, Ethereum holdings, and trends in Solana. The implications of the US Nonfarm Payrolls report for Federal Reserve decisions were also discussed. The article included disclaimers, stating that the information is not a trading recommendation and that there are risks with market investments. FXStreet offers forward-looking content, which carries uncertainties and risks. The article states that they are not liable for any errors, omissions, or losses. Both FXStreet and the author clarify that they do not provide personalized investment advice nor are they registered investment advisors.

Economic Expansion and Policy

The recent Australian manufacturing PMI reading of 52.2 for December indicates ongoing economic expansion. With Australia’s inflation rate easing to 3.1% in the third quarter of 2025, the Reserve Bank of Australia is likely to keep rates steady for now. This contrasts with other central banks that are cutting rates. Due to this difference, we expect the Australian dollar to strengthen, especially against the US dollar. The US Federal Reserve recently lowered rates by 25 basis points due to slowing GDP growth, which was reported at 1.2% for the third quarter of 2025. Buying call options on the AUD/USD pair that expire in late January or February 2026 is a way to take advantage of this trend while managing risk. Next, we are watching the US Nonfarm Payrolls report closely. If the jobs number is lower than expected, it would support the Fed’s dovish outlook and likely push the US dollar down further. Current implied volatility levels in forex options indicate that the market anticipates a significant move after this report is released. This situation is beneficial for assets priced in US dollars, which explains why gold is maintaining a price above $4,300 per ounce. This suggests that traders are hedging against further dollar weakness and securing value. Such market sentiment should support our long positions on the Australian dollar. Reflecting on the past, a similar pattern occurred after the 2009 recovery when a weaker US dollar and rising global demand for commodities boosted the Australian dollar over several years. We can use this historical context to guide our strategy in the coming weeks, as conditions appear favorable for repeated success. Create your live VT Markets account and start trading now.

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