AUD Hits 6 Year Low After Lower Chinese PMI

The Australian dollar fell to a fresh six-year low and stocks across Asia dropped sharply after more signs of a slowdown in the Chinese economy.

The Aussie dipped below US73c for the first time since May 2009 on news that Chinese manufacturing activity slowed by more than expected, while good US jobs data bolstered bets that the Federal Reserve is on track to hike interest rates later this year.

The flash Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 48.2, below economists’ estimate for a reading of 49.7 and the lowest reading since April last year. It was the fifth straight month below 50, the level which separates contraction from expansion, and the lowest reading since April 2014.

In early afternoon trade, the dollar was buying US72.86c having fallen as low as US72.70c.

via The Guardian

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza