The Australian dollar has tumbled today after weak data out of China and a shock devaluation of the Chinese Yuan raised fears over the health of the world’s 2nd largest economy.
AT 8.55pm (GMT) the Aussie dollar was trading at US72.14c after finishing the year on a high note last Thursday at US73.04c.
The latest Caixin Manufacturing PMI data out of China fell for the 10th month in a row, coming in at 48.2 for the last month of the year and below analyst’s expectations for a reading of 48.9.
A number below 50 shows the sector in contraction mode with the optimists out numbering the pessimists.
The news also sent the Chinese stock market tumbling with the FTSE China A50 composite index falling 7 percent and causing an automatic trading halt for the rest of the session.
Also pressuring the Australian dollar was the decision by the Chinese central bank to devalue the Chinese yuan to its lowest level in 11 years against the US dollar in another effort to boost exports.
This important sector is the backbone of the Chinese economy and has been in decline for some time.