Aussie falls after weak China PMI data

Data out of the world’s second largest economy this morning disappointed investors and soured market sentiment.

Both Purchasing Managers’ Index (PMI) readings – the official and the Caixin – manufacturing PMI came in lower than expected. China’s manufacturing sector continued to deteriorate in February due a steep fall in production levels leading to the steepest fall in stocks of finished goods in over four years.

The Caixin manufacturing PMI posted at 48.0 in February, down from 48.4 at the start of the year, and its lowest reading for five months.

The official manufacturing PMI came in at 49.0, missing forecast for 49.3 and below January’s reading of 49.4.

A number below 50 points indicates a decline in factory activity, while one above suggests expansion.

The Australian dollar reacted negatively to the data today. The aussie is widely considered a proxy for China plays because China is a major trading partner for Australia. AUD/USD dropped as much as 0.4 percent to $0.7105 U.S. cents after the data.

The post Aussie falls after weak China PMI data appeared first on FXTM Blog.

Source:: Aussie falls after weak China PMI data

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