THE TAKEAWAY: Small improvement in Chinese services > Largely domestic data, risk aversion trades continuing > AUD unchanged
Official July data for Chinese non-manufacturing PMI came in at a higher record than previous. Despite the mild expansion in the Chinese service industry, the Australian dollar was capped by risk-aversion trades continuing into early Asian session.
July Chinese Non-manufacturing PMI came in at 59.6 versus a previous 57.0. The higher services report came on the heels of a higher than expected, but weaker than previous PMI manufacturing recorded on Monday.
Read DailyFX’s commentary on Chinese Manufacturing PMI here.
China Non-manufacturing PMI. Chart generated with Bloomberg LP Professional Terminal.
The Australian and New Zealand dollars were relatively unchanged after the Chinese data as the reading deals mostly with the domestic Chinese economy, and has little guidance on the direction of Australian and New Zealand exports to China. Despite not having much effect on the currency markets, Asia traders may be relieved that the domestic services sector was still growing despite continued tightening efforts, though weary that this improvement may lead to additional efforts by the Chinese economy to keep their economy from overheating.
AUDUSD 5 minute chart; vertical line indicates time of release. Chart generated with FXCM Strategy Trader.
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