The Australian Dollar moved lower against its U.S. counterpart following the release of PMI data from China which provided more evidence that their economy is slowing beyond the government’s intentions. The Chinese Federation of Logistics and Purchasing reported that May’s PMI reading slipped to 50.4 from April’s 53.3 while the HSBC PMI report showed a similar decline dropping from 48.7 to 48.4. The Australian economy is heavily dependent upon trade with China for the exportation of its commodities, and a slowdown in China has significant and detrimental repercussions.
As reported at 2:04 p.m. (JST) in Tokyo, the Australian Dollar slipped to $0.9686 against the U.S. Dollar a decline of 0.4%; earlier in the session it had struck $0.9648, an 8-month low and the weakest reading in 2012.
The Euro also moved lower against the U.S. Dollar as Spanish concerns continue to weigh; at one point in the Asian session, the EUR/USD had traded at $1.2324, a level not seen in nearly two years, before recovering to $1.2348, a decline of 0.2%.One analyst who had expected that the EUR/USD was on track to hit $1.18 before the end of the third quarter, now believes that possibility will happen much sooner.