The Australian dollar slipped lower against its U.S. counterpart on Monday, after the release of disappointing Chinese manufacturing activity data added to concerns over a slowdown in the world’s second biggest economy.
AUD/USD hit 0.7044 during late Asian trade, the pair’s lowest since February 28; the pair subsequently consolidated at 0.7068, shedding 0.28%.
In addition, data on Friday showed that the U.S. economy grew at an annual rate of 0.7% in the fourth quarter, compared to forecasts for growth of 0.8% after 2% growth in the third quarter.
The U.S. economy grew 2.4% in 2015 the Commerce Department said, matching similar growth in 2014.
The Aussie was lower against the euro, with EUR/AUD gaining 0.41% to 1.5351.
The traditional safe haven yen remained lower despite official data on Monday showing that manufacturing activity in China contracted for a sixth straight month in January.
The Chinese manufacturing purchasing managers’ index slid to 49.4 from 49.7 in December, falling further below the 50 level separating contraction from growth.
A separate report showed that China’s Caixin factory PMI ticked up to 48.4 from 48.2 in December, indicating that the world’s second largest economy got off to a weak start in 2016.
The pound held gains against the dollar on Monday after data showing that U.K. factory activity grew at the fastest rate in three months in January, pointing to a modest improvement at the start of 2016.
GBP/USD was up 0.43% at 1.4304 little changed from ahead of the data.
Markit said that its U.K. manufacturing purchasing managers’ index rose to 52.9 from December’s 52.1, compared to expectations for a downtick to 51.8.
The Investing.com weekly sentiment index published on Monday revealed that speculators added to their bullish bets on the yen in the week ending January 29.
According to the report, 31.6% of market participants held long positions in USD/JPY as of last week, falling from 37.3% in the preceding week. A reading between 30% and 50% is bearish for the instrument.
Meanwhile, 34.3% of investors held long positions in EUR/USD as of last week, rising slightly from 33.2% a week earlier, 39.8% of investors were long GBP/USD, compared to 40.3% in the preceding week, while 46.4% of investors were long USD/CHF, up from 44.1% in the previous week.
The dollar pushed lower against the other major currencies on Monday, after data showed that U.S. consumer spending was flat in December and as concerns over global economic growth persisted.
The Commerce Department said that personal spending was flat last month, missing forecasts for a gain of 0.1%. Personal spending for November was revised up to 0.5% from a previously reported rise of 0.3%.
Personal income, meanwhile, rose by 0.3%, above forecasts for a 0.2% gain and after rising 0.3% a month earlier.
The Institute for Supply Management said its index of purchasing managers inched up to 48.2 last month from a reading of 48.0 in December. Analysts had expected the manufacturing PMI to rise to 48.1 in January.
