Forex Marketz Daily Forex News – Fully Markets Update
The Australian dollar, or AUD/USD forex market sank this morning. The Aussie dollar actually fell against all of its major G-20 trade partner after a weaker than expected Chinese private Caixin manufacturing PMI reading crossed the news wires. Please remember that in these data series, a reading above 50 indicates growth while a print below 50 is an indication of contraction.
The financial markets were expecting another improvement in China’s private manufacturing sector. Yesterday’s official PMI data was stronger. What we got today was the exact of opposite of yesterday. Today’s Chinese Caixin PMI survey printed at 49.6 versus the 50.1 that was expected. This print indicates a contraction in the manufacturing sector. This was the first contraction since June 2016. Which was almost one year ago.
Chinese data sinks the Australian Dollar
Australia’s largest regional trade partner is China. This said, economic news flow from China often impacts the Australian dollar. The above MT 4 chart shows the negative impact quite clearly.
On an interesting note, the PMI data hit the wires just 15 minutes after a strong print of Australia’s retail sales. That sent the Aussie dollar higher only to be erased by the weak PMI data out of their trade partner. This shows the strength of the knock-off effects the economy in China has on Australia’s economic growth and economic well-being.
