Australian Dollar Loses After Chinese PMI Disappoints
THE TAKEAWAY: Chinese Non-Manufacturing PMI Fell to 56.1 in April > Fears of Global Growth Slowdown Enhanced, Leading Traders to Adjust Portfolios > AUDUSD Fell
Data published by the China Federation of Logistics and Purchasing shows that the country’s non-manufacturing purchasing managers’ index dropped to 56.1 in April from 58.0 in March. The negative figure continued a series of indicators over the past few months that suggested a drop off in Chinese growth.
A cooling Chinese economy is a drag on local nations that rely on the country for trade. As fears of a global slowdown of economic growth were renewed, traders sold currencies native to exporting countries reliant on Chinese consumption, like the Aussie.
The Australian dollar follows poor Chinese PMI since a weak Aussie export sector would suggest that the likelihood of a central bank rate cut is more likely. The AUDUSD fell from 1.0311 as low as 1.0303 in the moments after the index’s release.
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