Weak China PMI data hurt copper prices and aussie

Risk sentiment was hurt in Asia after disappointing PMI data out of China. The weak factory survey from the world’s second largest economy heightened fears of an entrenched global economic slowdown.

According to a private survey, activity in China’s factory sector shrank at a faster pace than expected in September, falling to its weakest level in 6-1/2 years as domestic and export demand continued to slump.

The preliminary Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) fell to 47.0 in September, the worst since March 2009 and well below market expectations of 47.5 and August’s final 47.3. Levels below 50 signify a contraction in activity.

The data affected commodity-linked currencies like the Australian dollar which wallowed at more than one-week lows at $0.7020.

The U.S. dollar consolidated most of its overnight gains in early Asian trade. It held firm at 96.439 against a basket of six currencies. Meanwhile, the safe haven Japanese yen held firm against the dollar at 120.24.

In its biggest one-day drop in more than two months, copper slid to three-week lows as fund and speculative selling pushed prices through sell stops, accelerating the pace of declines.

Broader risk aversion failed to lift demand for precious metals with both spot gold and silver nursing big overnight losses.

The post Weak China PMI data hurt copper prices and aussie appeared first on Forex Circles.

Source:: Weak China PMI data hurt copper prices and aussie

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