The Australian dollar fell today after the report showed a slowdown of China’s manufacturing. The slowdown may curb demand for commodities and that, in turn, would hurt Australia’s economy.
The Flash China Manufacturing PMI fell to 48.9 in July from 50.1 in June. The Flash China Manufacturing Output Index dropped to 47.2 this month from 49.8 in the month before. Both indexes were at 28-month low. Hongbin Qu, Chief Economist, China &
Headline flash PMI fell below 50 for the first time since July 2010, suggesting slowing momentum of manufacturing activities. This implies that June’s rebound in industrial production was just temporary. We expect industrial growth to decelerate in the coming months as tightening measures continue to filter through. That said, resilience of consumer spending and continued investment in a massive amount of infrastructure projects should support a nearly 9% rate of GDP growth in the rest of the year.
AUD/USD dropped from 1.0748 to 1.0700 as of 10:35 GMT after reaching the intraday high of 1.0772.
If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.
