China's Caixin Services PMI unexpectedly drops to 50.3 in June, AUD/USD unfazed

China's Caixin services PMI for June came in at 50.3 vs. 55.7 expected and 55.1 last, showing a sharp slowdown in the country’s services activity in the reported month.

The Composite Output Index dropped from 53.8 in May to 50.6 in June, signaled a weakening services sector expansion.

Key findings

Softest increases in activity and new work for 14 months.

Staff numbers fall as capacity pressures ease.

Rates of input cost and output charge inflation slow notably.

Commenting on the China General Services PMI ™ data, Dr. Wang Zhe, Senior Economist at Caixin Insight Group said: "The June reading was the lowest since April 2020. The services sector expanded for the 14th month in a row in June, but the rate of expansion significantly slowed from the previous month.”

"Both supply and demand in the services sector expanded. The gauges for business activity and total new orders remained in positive territory for the 14th consecutive month in June, but both fell to the lowest in 14 months. The recent resurgence of Covid-19 in the Pearl River Delta had a certain impact on the services sector. External demand marginally improved. The gauge of new export business rose into positive territory, though the rate of expansion was marginal,” he added

AUD/USD holds above 0.7500

The downbeat Chinese Services PMI numbers failed to deter the AUD bulls, as AUD/USD holds the latest uptick above 0.7500.

The spot was last seen trading at 0.7517, down 0.13% on the day.