Australian Dollar Loses After Chinese PMI Disappoints

By Eric Andersen,

THE TAKEAWAY : Chinese Non-Manufacturing PMI Fell to 56.1 in April > Fears of Global Growth Slowdown Enhanced, Leading Traders to Adjust Portfolios > AUDUSD Fell

Data published by the China Federation of Logistics and Purchasing shows that the country’s non-manufacturing purchasing managers’ index dropped to 56.1 in April from 58.0 in March. The negative figure continued a series of indicators over the past few months that suggested a drop off in Chinese growth.

A cooling Chinese economy is a drag on local nations that rely on the country for trade. As fears of a global slowdown of economic growth were renewed, traders sold currencies native to exporting countries reliant on Chinese consumption, like the Aussie.

The Australian dollar follows poor Chinese PMI since a weak Aussie export sector would suggest that the likelihood of a central bank rate cut is more likely. The AUDUSD fell from 1.0311 as low as 1.0303 in the moments after the index’s release.
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Original Article: http://www.dailyfx.com/forex/market_alert/2012/05/03/Australian_Dollar_Loses_After_Chinese_PMI_Disappoints.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.