The Australian dollar continued off of support at 1.0210 in the short term, rising to a 3 1/2 week high on the heels of a better than anticipated manufacturing report.  Currently, the Aussie is trading up at 1.0288 versus the dollar, the first time since December 8th.

According to a report published by PriceWaterhouseCoopers and the Australian Industry Group, manufacturing in the Pacific economy picked up for the first time in six months, as activity in basic metal companies helped to buoy the index in the month of December.  Readings jumped to 50.2 in the last month of 2011, compared to November’s 47.8.  Readings below 50 are indicative of contractionary conditions.

The results are encouraging considering that market expectations had been floating around the likelihood of another below 50 print, a cause for concern for the Australian economy – and in light of the Reserve Bank of Australia enacting the first back to back rate cuts since 2009 on December 6th.  However, further optimism is being buttressed by positive subindex numbers – namely new orders, employment and wage readings.  New orders for the month climbed to a reading of 49.9, higher by almost 4% compared to last month.  Employment and wage marks additionally gained – increasing to 46 and 61.1 respectively.

The report’s gains are helping to buoy sentiment that the Australian economy may continue to weather the recessionary storm currently engulfing Asia-Pacific nations – including the country’s main trading partners.