AUD Loses Ground as China's Factory Activity Contraction Continues

The Australian Dollar weakened against the US Dollar after China's National Bureau of Statistics reported that its Manufacturing Purchasing Managers' Index (PMI) fell to 49.4 in July, down from 49.5 in June and below the 50.0 threshold.

This marks the third consecutive month of contraction for China's factory activity, which weighs on risk sentiment and affects the Australian Dollar due to their close trade ties.

The data was released at 01:30 GMT, causing the AUD/USD pair to slip by about 0.2% to trade near 0.6530 during the Asian session.

Australia's economy is highly sensitive to Chinese demand for its commodity exports, including iron ore, coal, and natural gas.