China’s Manufacturing PMI rose to 50.1 in December, surpassing expectations of 49.2. The Non-Manufacturing PMI also increased to 50.2, indicating modest growth in those sectors.
Despite the positive Chinese data, the NZD/USD exchange rate remained below 0.5800. Similarly, the Australian Dollar held steady after the NBS report.
Changes In USD CNY Rates
Meanwhile, the People’s Bank of China set the USD/CNY reference rate at 7.0288, down slightly from 7.0348. The GBP/USD stayed stable above 1.3450, even with low trading volumes.
In wider markets, the EUR/USD fell below 1.1750 after the Federal Reserve released its meeting minutes. Trading volumes are light due to the upcoming New Year holidays.
In commodities, gold aimed for another rise toward $4,400 during Asian trading, supported by the positive Chinese PMI data. Trading was mostly flat, and indexes like the S&P 500 showed little movement.
Looking ahead to 2026, we expect solid economic performance, thanks to ongoing supportive factors from 2025. The crypto market outlook remains volatile, affected by regulatory changes and technology adoption.
Impact Of Chinese Manufacturing PMI
The unexpected rise in China’s manufacturing PMI to 50.1 signals important trends as we move into January. Although barely in the expansion zone, this breaks a trend of weaker data from the third quarter of 2025. Since China consumes over 50% of the world’s refined copper, this news could spark interest in industrial metals that have remained dormant.
The Australian Dollar, often seen as a reflection of the Chinese economy, has faced pressure for weeks. This positive data provides a reason to consider call options on the AUD/USD, anticipating a turnaround in early 2026. This is even more relevant given the slow holiday markets where new trends can quickly develop.
Gold’s movement toward $4,400 appears partly influenced by the positive news from China, highlighting a focus on industrial demand. However, if this data suggests a broader ‘risk-on’ sentiment for 2026, the demand for gold as a safe haven might lessen. This could present an opportunity to buy puts, betting that gold is overpriced compared to its historical link with real interest rates.
Trading volumes are low, meaning unexpected news could cause significant market movements. Implied volatility for China-related assets, like options on the FXI ETF, may be underestimated as we approach the first full week of trading. Reflecting on early January 2023, we saw how quickly market sentiment could change post-New Year, leading to sharp price shifts.
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