The Australian Dollar holds gains despite softer Chinese PMI data, while a weaker US GDP print weighs on the USD.
AUD/USD remains near 0.7030 on Friday, consolidating after a recent rally. The pair is supported by broad US Dollar weakness but faces headwinds from disappointing Chinese economic data.
China’s manufacturing PMI fell to 49.2 in July from 50.3, missing forecasts of 50, while non-manufacturing PMI dropped to 49. The data signals slowing activity in Australia’s largest trading partner, a drag on the AUD. Meanwhile, US GDP growth slowed to 1.5% in Q2, below the 2.1% consensus, pressuring the USD.
Markets have scaled back RBA rate hike bets after softer Australian inflation data, reducing support for the AUD ahead of next week’s policy meeting.