China's Caixin Manufacturing PMI reaches 51 amidst weak overseas demand.

• The China Caixin Manufacturing PMI exceeds expectations, increasing to 51.0 in August.
• Although the overall PMI figure is positive, there is still a decline in international demand.
• The next awaited event is the release of the US Jobs Report.

China Caixin Manufacturing PMI Exceeds Expectations

China's Caixin Manufacturing PMI showcased an impressive performance, rising from 49.2 to 51.0 in August, surpassing economists' forecast of 49.3.

Key findings from the August survey include:

1. Domestic orders experienced growth, contributing to the overall increase in market conditions.
2. Overseas orders, on the other hand, continued to decline, albeit at a slower pace.
3. The rise in new orders led to increased production, but companies remained cautious about inventory buildup.
4. Manufacturers expanded their workforce as part of their growth plans, resulting in the most significant job creation rate since March 2010.
5. Input prices rose due to higher raw material costs, marking the first increase since February.
6. Despite the higher input prices, firms reduced output prices in response to increased competition for new business.
7. Optimism within the manufacturing sector declined to an 11-month low in August.

While the return to growth is positive, the weakness in overseas demand remains a concern. To support economic recovery, the Chinese economy will require more than just domestic demand.

Impact on AUD/USD Exchange Rate

Prior to the release of the China Caixin Manufacturing PMI report, the AUD/USD pair initially fell to a low of $0.64739 before reaching a pre-stat high of $0.64999.

Subsequently, in response to the Caixin survey, the AUD to USD exchange rate increased to a post-stat high of $0.64917 before declining to a low of $0.64814.

As of this morning, the Aussie Dollar saw a slight increase of 0.01% and traded at $0.64850.

Upcoming Economic Events

The focus in the afternoon will be on the US Jobs Report. With differing views on the Federal Reserve's interest rate goals, wage growth and unemployment figures could impact expectations of a final rate hike.

Economists anticipate a 4.4% year-on-year increase in average hourly earnings for July. Despite disappointing ADP and JOLTs numbers, a US unemployment rate of 3.5% is expected by economists.

Additionally, the ISM Manufacturing and finalized S&P Global Manufacturing PMIs will draw interest, as investors analyze data points that may influence Federal Reserve monetary policy expectations.