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Australian dollar slides toward six-year low as Chinese slowdown deepens
[SYDNEY] Australia's dollar dropped toward a six-year low as a decline in a Chinese manufacturing gauge signaled a deepening slowdown in the world's second-largest economy.
The Aussie weakened versus all except one of its 16 major counterparts after Caixin Media and Markit Economics said the preliminary reading for their China Purchasing Managers' Index fell to 47.1 for August from a final figure of 47.8 the previous month. Numbers below 50 indicate contraction. New Zealand's currency also slipped.
"The PMI was a very disappointing number and confirms the need for more targeted stimulus from China," said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. "It's risk off in FX markets, with the Australian and New Zealand dollars lower, and the yen higher." Australia's dollar fell 0.5 per cent to 72.98 US cents at 11:03 am in Tokyo after slumping to 72.16 on Aug 12, the lowest since April 2009. New Zealand's kiwi slipped 0.2 per cent to 66.15 US cents.