Aussie dollar loses lift from Chinese data The Australian dollar only managed short-lived gains on Monday morning as the euphoria from better than expected Chinese purchasing managers" index data faded fast. The Australian currency is highly correlated to Chinese demand and had bounced after strong Chinese data released on Sunday boosted risk appetite. IN Currencies Chinese manufacturing PMI data, an important indicator of factory activity, showed a strong increase to 53.1 to beat expectations of a 50.8 reading. However, analysts noted that China's March PMIs typically benefit from a seasonal bounce and China has still to post service sector data later in the week. The Aussie lost 0.6 per cent to $1.382 against the US dollar and 1.2 per cent to Y85.67 against the Japanese yen. The Aussie may also stutter further ahead of the Reserve Bank of Australia's monetary policy meeting on Tuesday. Although the majority of analysts expect rates to be kept on hold, some observers have predicted another rate cut as Australia's economic outlook darkens. The Japanese yen jumped 0.5 per cent against the US dollar to Y82.54 and 0.9 per cent against the euro to 109.94 to shrug off its disappointing first quarter Tankan survey results. The Bank of Japan's Tankan headline index, which compares the percentage of large manufacturers reporting positive business conditions with those reporting negative ones, was minus 4 in March, the same reading as reported in December. Analysts had forecast the index would improve to minus 1. However as Marc Chandler, a Brown Brothers Harriman analyst, noted, data from the Commodity Futures Trading Commission showed a violent shift in yen positions indicating an expectation of weakness to come. In early February, the gross long position was the largest since the second quarter of 2008. In late March the gross short position is the largest since the third quarter of 2007," he said. Sterling gained another 0.1 per cent against the dollar, to as high as $1.6062, and 0.2 per cent against the euro, to £0.8350, helped by a surprisingly strong set of UK manufacturing PMIs. The data brought sterling close to 13-month highs on a trade-weighted basis ahead of the Bank of England's monetary policy decision on Thursday. CFTC data showed sterling shorts improved for the second consecutive week to their best levels since last August. The dollar index traded flat at 78.922 at the start of a week which will see the release of the US Federal Reserve policy meeting minutes and car sales data on Tuesday before the all-important US non-farm payrolls data is released on Good Friday. Meanwhile, the euro largely ignored its own set of predictably poor PMIs and unemployment data to trade down 0.2 per cent against the dollar at $1.3324.