AUD Holds Steady Amid Weaker China Data and Stronger USD

Australia's currency held steady despite weaker-than-expected Chinese business activity data and a stronger US Dollar. The Australian Dollar (AUD/USD) traded around the 0.7020 area in Friday's American session, under mild pressure from the disappointing PMIs.

The Manufacturing PMI fell to 49.2 in July, well below the consensus of 50.0, while the Non-Manufacturing PMI eased to 49.0 from 50.2. The weaker readings reinforced concerns over slowing demand in Australia's largest trading partner, limiting demand for the AUD.

Australia's Producer Price Index (PPI) accelerated to 3.6% YoY in the second quarter, suggesting pipeline inflation pressure remains elevated. However, this stronger inflation reading was insufficient to offset the negative impact from China and the stronger US Dollar.