China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) unexpectedly contracted to 49.8 in July, compared to a 51.8 print registered in June, the latest data showed on Wednesday.
The market consensus was 51.5 in the reported month.
Key highlights of China’s PMI data
Output expands at the slowest pace in nine months.
Average selling prices decline as input cost inflation eases.
Business confidence improves in July.
According to Wang Zhe, an economist at Caixin Insight Group, “Supply continued to outpace demand. Manufacturers’ output grew for the ninth straight month in July, although the growth was marginal, indicating the production expansion was limited.”
Wang added, “Performance on the demand side was weaker, with total new orders declining for the first time since July last year.”
Data released by China’s National Bureau of Statistics (NBS) showed Wednesday that the official Manufacturing Purchasing Managers’ Index (PMI) declined to 49.4 in July, beating estimates of 49.3. The Non-Manufacturing PMI dipped to 50.2 in the same period vs. June’s 50.5 and the expected 50.2 figure.
AUD/USD reaction to China’s PMI data
The downbeat Chinese Manufacturing PMI exerts renewed selling pressure on the Aussie Dollar, as AUD/USD flirts with intraday lows near 0.6635 at the time of writing, modestly flat on the day.
Expert Analysis and Impact on Finances
As the Chinese PMI data contracts, it signals a potential slowdown in the manufacturing sector, which could have ripple effects on global trade and economic growth. Investors should closely monitor the AUD/USD pair as the Aussie Dollar reacts to the news, with potential opportunities for trading or investment adjustments.
Factors such as interest rates, Chinese economic health, Iron Ore prices, and Trade Balance will play a crucial role in determining the future movements of the Australian Dollar. Stay informed and stay ahead in the financial markets.