AUD Slips as China's Manufacturing Sector Contracts

The Australian Dollar has declined against the US Dollar as China's manufacturing sector contracted in July. The NBS Manufacturing PMI fell to 49.2, below market expectations of 50.0 and down from 50.3 in June.

This disappointing data has put pressure on the AUD/USD, which had previously seen a gain of over 1% in the previous day. The pair is currently trading around 0.7020 during Asian hours on Friday.

The Australian Dollar's decline can also be attributed to soft Q2 inflation, which has made an August RBA rate hike less likely. Analysts at Deutsche Bank highlight that annual inflation moderated from +4.0% to +3.8% yoy, further easing pressure on the Reserve Bank of Australia (RBA).