Australian Services Industry Improves Slightly, Market Awaits Chinese Data
THE TAKEAWAY: Australian services industry shows improvement in June versus prior, but remains below the 50 expansion level > Market Awaits upcoming Chinese Data > AUD/USD Flat
The AiG Performance of Service Index moved up marginally to 41.5 from 40.6 in June. The previous print above 50 in services PMI was back in January, 2012. It has been a struggle for Australia to show any significant expansion over the past few years despite going without a recession for decades.
The Performance of Service Index is an indicator that comprises of surveys from various service oriented companies. Readings above 50 indicate an expansion and those below 50 show contraction. Although the reading fluctuates with the seasons, it is a good overall indicator of the sector.
Source: FXCM Marketscope
The Australian Dollar traded slightly lower after the services industry showed meager signs of improvement month over month. Upcoming Chinese non-manufacturing PMI data due out at 01:00GMT may impact the AUD/USD pair as any slowdown in the Chinese economy weighs heavily negative on Australian exports. As the world’s second largest economy, China is Australia’s largest trading partner and accounts for 29.5% of her exports.Continued concerns over China could push the AUD/USD pair to fresh lows in the weeks and months to come.
Gregory Marks, DailyFX Research Team
Jimmy Yang, DailyFX Research Team
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