The Australian dollar continues to fall as China’s PMI declines
The Australian dollar against the US dollar (AUD/USD) continued to decline today, falling to a two-week low of 0.6455. The decline came after China’s services PMI missed expectations by a large margin, falling to 49.7 from the expected 50.4.
A decline in China’s PMI signals slowing economic growth in China, Australia’s largest trading partner. It also indicates that concerns about a global recession may continue to pressure the Aussie.
Furthermore, the Reserve Bank of Australia appears to have finished its monetary tightening cycle, meaning there is less support for the Australian dollar from monetary policy. In contrast, the US dollar, as a safe haven currency, continues to enjoy strong support.
However, AUD/USD may see some bounce in the near future, as investors await the upcoming US data. However, the overall bearish trend remains in place, and the US dollar is expected to remain stronger than the Australian dollar for the foreseeable future.
The main target for sellers is the 0.6168 level
