China's Caixin Services PMI drops sharply to 53.9 in June vs. May’s 57.1

Dhwani Mehta FXStreet

China's Services Purchasing Managers' Index (PMI) tumbles to 53.9 in June, compared with a 57.1 expansion seen in May, according to the latest data published by Caixin released on Wednesday.

Key points

Service sector activity expands at slower rate amid weaker upturn in sales.

Employment rises for fifth straight month.

Business confidence improves.

Commenting on the China General Services PMI ™ data, Dr. Wang Zhe, Senior Economist at Caixin Insight Group said: “Both services supply and demand expanded further in June, but at a slower pace. The gauges for business activity and total new orders both stayed above 50 for the sixth consecutive month, but logged their lowest readings since January and December, respectively, as the services market saw a weaker-than-expected recovery.”

“External demand remained relatively stable as the lifting of travel restrictions boosted services exports, with the measure for new export orders staying in expansionary territory for the sixth month in a row,” Wang added.

AUD/USD reaction

Weak Chinese Services PMI bodes ill for the Aussie Dollar, dragging AUD/USD 15 pips below 0.6700. The major is trading at 0.6685, at the time of writing, down 0.07% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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