Activity in China's factory sector shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, a private survey showed, adding to worries that the world's second-largest economy may be slowing sharply. China's surprise devaluation of the yuan last week and a near-collapse in its stock markets in early summer have sparked fears that it could be at risk of a hard landing which would hammer world growth, sending financial markets into a tailspin.
The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) stood at 47.1 in August, well below expectations of 47.7 and down from July's final 47.8. The reading was the worst since March 2009, in the depths of the global financial crisis, and the sixth straight one below the 50-point level, which separates growth in activity from contraction on a monthly basis.A detailed breakdown of the activity survey showed conditions were deteriorating on almost every level, with factory output sinking to a near four-year low, domestic and export orders declining at a faster rate than in July and companies laid off more workers.
After the data Aussie fell and is currently being traded few points above 0.73 handle. Pair is likely to find support around 0.7270 area and resistance above 0.7370 level. Later today, in the US session, Manufacturing PMI figures are scheduled for a release.
