The Australian Dollar eased back from previous highs against the greenback after the latest data from China dampened investors’ optimism of improvement for the second largest economy in the world. The NBS PMI or Purchasing Manager’s Index for China which was released early Saturday showed that the May reading beat expectations of 50.1 with an improvement to 50.8 from 50.6; however, earlier today the private sector’s HSBC reading fell to 49.2 from 50.4, against expectations of a slighter fall to 49.6. The “official” reading reflects activity among a smaller sampling which includes the larger government-owned entities while the private sector reading reflects activity among a larger sampling in non-government, privately-owned enterprises.
Because Australia’s primary export market is China, any impact on the Chinese economy reflects immediately in the Aussie Dollar. As reported at 1:42 p.m. (JST) in Tokyo, the AUD/USD was trading at $0.9619, falling from the previous session’s 0.7% gain which brought the pair to a high of $0.9640. The Aussie Dollar hit a 19-month low last month and plunged 7.7% for the month, the largest single month’s decline since September 2011. The Australian Dollar even performed poorly against the Japanese Yen during the month of May, dropping 4.8% in value even though most other currencies appreciated against the Japanese currency.