China’s NBS Manufacturing PMI beats expectation in June: What 50.3 means for the Australian Dollar
China’s official Manufacturing Purchasing Managers' Index (PMI) rose to 50.3 in June, compared to 50.0 in the previous reading. The reading came in above the market consensus of 50.1 in the reported month.
More to come...
What do China’s PMI data mean for the Australian Dollar?
China’s Manufacturing PMI is a leading indicator gauging business activity in China’s manufacturing sector, highlighting the health of the manufacturing sector, considered as the backbone of the Chinese economy.
Meanwhile, Non-Manufacturing PMI is a leading indicator gauging business activity in China’s non-manufacturing sector, namely services and construction. This data highlights the performance of China’s service sector, which has a significant impact on the global FX market, given the size of the Chinese economy.
Both China’s Manufacturing and Non-Manufacturing PMIs are closely watched by traders, as China is Australia's largest trading partner. These reports do not directly determine the Reserve Bank of Australia (RBA) decisions, but they can affect the Australian economy through trade and commodity channels.
Stronger-than-expected PMI readings signals stronger business activity and economic growth in China, which could lift the China-proxy Aussie as risk sentiment improves. On the other hand, weaker-than-expected readings could indicate slowing economic activity and weigh on the AUD.
Technical Analysis: AUD/USD maintains negative outlook in the near term under 100-day SMA
In the daily chart, AUD/USD retains a bearish near-term bias as spot holds below the 100-day simple moving average (SMA) and the Bollinger middle band. Price is only slightly above the lower Bollinger band, underscoring downside pressure, while the Relative Strength Index (14) at 26.30 hovers in oversold territory and hints that the latest slide could be losing some momentum without yet signaling a bullish turn.
On the topside, initial resistance emerges at the Bollinger middle band at 0.7000, followed by the 100-day SMA at 0.7078 and then the upper Bollinger band near 0.7155, where a break would be needed to ease the broader bearish tone. On the downside, immediate support is located at the lower Bollinger band around 0.6848; a clear move beneath this floor would open the door to further weakness, while holding above it would merely indicate consolidation within a still-capped structure.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
NBS Manufacturing PMI
The NBS Manufacturing Purchasing Managers Index (PMI), released by the China Federation of Logistics & Purchasing (CFLP) and China’s National Bureau of Statistics (NBS), is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at manufacturing 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 manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.
Read more.Last release: Sun May 31, 2026 01:30
Frequency: Monthly
Actual: 50
Consensus: 50
Previous: 50.3
Source: China Federation of Logistics and Purchasing
The monthly manufacturing PMI is released by China Federation of Logistics and Purchasing (CFLP) on the last day of every month. The official PMI is released before the Caixin Manufacturing PMI, which makes it even more of a leading indicator, highlighting the health of the manufacturing sector, considered as the backbone of the Chinese economy. The data is of high relevance for the financial markets throughout several asset classes, given China’s influence on the global economy.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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