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Investing.com - The Aussie gained solidly on Wednesday after better-than-expected GDP data set the tone. AUD/USD traded at 0.7212, up 0.53%, while USD/JPY changed hands at 113.88, down 0.12%. Australian GDP data for the fourth quarter showed a gain of 0.6%, better than the 0.4% gain seen quarter-on-quarter and came in at a 3.0% pace year-on-year, beating the 2.9% gain expected. Earlier in Australia, HIA new home sales for January rose 3.1% month-on-month, compared to a 6.0% gain in the previous month. On Tuesday, the Reserve Bank of Australia held its cash rate at a record low 2%, as expected, and said there was scope for further easing if needed. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.06% to 98.34. Overnight, the dollar rose to fresh one-month highs against the other major currencies on Tuesday, after the release of upbeat U.S. manufacturing activity data added to optimism over the strength of the economy. The Institute for Supply Management said its index of purchasing managers inched up to 49.5 last month from a reading of 48.2 in January. Analysts had expected the manufacturing PMI to rise to 48.5 in February. The safe-haven yen strengthened earlier after data showed that activity in China’s manufacturing sector contracted for the seventh straight month in February. The official manufacturing PMI fell to 49.0 from January's reading of 49.4, falling further below the 50 level that separates growth from contraction. Economists had expected the index to tick down to 49.3. The private sector Caixin manufacturing PMI was also weaker, falling to 48.0, from 48.4 in January, undershooting market expectations of 48.3.
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