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China services PMI falls to 50.4 in July, weighing on AUD
The reading missed expectations of 53.7, and the article links weaker China growth to lower demand for Australian exports that often pressures the Australian dollar.
China's Services Purchasing Managers' Index (PMI) eased to 50.4 in July from 54.1 in June, according to data published by RatingDog, and the figure came in below market expectations of 53.7.
FXStreet notes that the Australian dollar can be highly sensitive to both Chinese economic conditions and commodity prices, with China described as Australia's largest trading partner.
The outlet says softer Chinese growth typically reduces demand for Australian raw materials and goods, which can weigh on AUD. It also points to Australia-focused drivers including the Reserve Bank of Australia's interest rate policy, with higher relative rates generally supporting the currency.
FXStreet further highlights iron ore as a key export, stating it accounted for $118 billion a year in 2021, and says iron ore price moves can translate into AUD moves, while trade balance improvements also tend to be AUD-positive.