2014.06.0206:07:00UTC+00Aussie holds flat amid firm China data

The Australian dollar is holding even Monday, amid a better than anticipated reading of factory activity in China. Aussie was trading at about 93.10 US cents on Monday.

An increase in new orders supported China's Purchasing Managers’ Index escalated to 50.8 in May, from 50.4 reading in April.

“The improvement of both PMIs suggests the economic activities have stabilised somewhat due to the recent pro-growth policies, including the budgeted fiscal spending acceleration and the tax rebates to support the external sector,” said Li-Gang Liu, Chief China economist at Australia and New Zealand Banking Group.

The upbeat figures from China was anticipated to give assistance to the Aussie, which has traded moderately flat in the last few days, but it instead may be waiting for another string of economic figures due Monday.

The boost in the official PMI comes after leaps in the HSBC flash PMI and the MNI indicator, a gauge of business and consumer confidence, also advanced.

“The improvements in the three leading indicators, along with more aggressive policy easing, does suggest that the upside risks to our forecast of GDP growth falling further to 7.1 per cent year-on-year in Q2 have risen, but we will wait to see more May activity data before assessing our call,” said Nomura economist Zhiwei Zhang.