Australian Dollar moves little following China’s Services PMI

Australian Dollar gains ground despite increased risk aversion.
China's RatingDog Services PMI eased to 52.1 in March from 56.7 in February.
Trump highlighted a Tehran bridge strike, warning of further action and urging Iran to “make a deal.”

Akhtar Faruqui FXStreet

AUD/USD gains ground after registering modest losses in the previous day, trading around 0.6910 during the Asian hours on Friday. The pair gains as the US Dollar (USD) softens, even amid stronger safe-haven demand due to escalating Middle East tensions. Trading activity may remain subdued owing to the Good Friday holiday.

China, Australia’s key trading partner, released the RatingDog Services Purchasing Managers’ Index (PMI) on Friday, which eased to 52.1 in March from 56.7 in February, the latest data published by RatingDog showed on Friday. This figure came in weaker than the expectations of 53.7.

Markets caution that higher energy prices, linked to the Middle East conflict, may push inflation higher, prompting downward revisions to growth forecasts and increasing expectations of further Reserve Bank of Australia (RBA) rate hikes amid rising stagflation risks. As of April 1, ASX 30 Day Interbank Cash Rate Futures for May 2026 were at 95.785, implying a 55% probability of a rate hike to 4.35% at the next RBA meeting.

US President Donald Trump on Thursday highlighted the destruction of a bridge in Tehran, warning of further action and urging Iran to strike a deal “before it is too late.” Meanwhile, Iran’s Foreign Minister Abbas Araghchi said recent US strikes on civilian infrastructure would not force Iran to retreat, adding they signal the “defeat and moral collapse of an enemy in disarray.”

Chicago Fed President Austan Goolsbee expressed concern over rising oil prices, noting they could complicate efforts to curb inflation, particularly if gasoline costs surge and lift inflation expectations.

Economic Indicator

RatingDog Services PMI

The RatingDog Services Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s services sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for CNY.

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