China’s Services Purchasing Managers’ Index (PMI) soared from 51.2 in June to 52.1 in July, surpassing market expectations by a significant margin, as per the latest data released by Caixin on Monday.
At the time of writing, the AUD/USD pair is bouncing back from losses to trade near 0.6500, still down 0.14% on the day.
Australian Dollar FAQs
One of the most crucial factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Additionally, the health of the Chinese economy, its largest trading partner, plays a significant role in influencing the value of the AUD.
Iron Ore, Australia’s largest export, also affects the Australian Dollar. When the price of Iron Ore rises, the AUD tends to appreciate, as demand for the currency increases.
The Trade Balance, which reflects the difference between a country’s exports and imports, is another factor that can impact the value of the Australian Dollar. A positive Trade Balance strengthens the AUD, while a negative balance has the opposite effect.
Analysis:
The surge in China’s Services PMI indicates a strong performance in the services sector, which could boost economic growth and demand for Australian exports. This could potentially lead to a positive impact on the Australian Dollar, depending on how the market reacts to the news.