The Aussie dollar, a proxy for China, traded lower on Tuesday in Asia after both the official and Caixin Purchasing Managers’ Index (PMI) in China for the April period missed estimates.
The AUD/USD pair fell 0.2% to 0.7044 by 12:35 AM ET (04:35 GMT) and was sent to its session lows immediately following the release of the PMI data.
The official PMI for manufacturing fell to 50.1 in April from March’s reading of 50.5. The reading was lower than the expected 50.5.
The Caixin/Markit manufacturing PMI, a private survey that focuses on small and mid-sized firms, came in at 50.2. That compares with the expected 51.0 and 50.8 from last month.
The USD/CNY pair edged up 0.1% to 6.7370.
The latest round of trade talks between the U.S. and China will begin in Beijing this week. U.S. Treasury Secretary Steve Mnuchin told the New York Times that negotiations are in “the final laps,” while U.S. President Donald Trump said last week that he would soon host Chinese leader Xi Jinping at the White House and might sign a possible agreement on trade there.
Meanwhile, The U.S. dollar index that tracks the greenback against a basket of other currencies was largely unchanged at 97.558 as markets await the outcome of the Federal Open Market Committee’s two-day meeting.
The FOMC, the Fed’s rate-making body, is currently targeting the rate at 2.25% to 2.5%. No change in policy is expected but much attention will center on Fed Chairman Jerome Powell’s press conference after the rate decision is announced.