**AUD/USD Remains Range-Bound Near 0.6450 After China Data and Ahead of US Event Risks**
_Adapted and expanded from an original article by FXStreet’s Anil Panchal_
The Australian dollar (AUD) remains under pressure against the US dollar (USD), with the AUD/USD pair holding close to the 0.6450 level in early Asia trading hours on November 5, 2024. The subdued performance comes in the wake of broadly weaker Chinese economic data and as investors turn their attention to several important US events and data releases scheduled for later in the week.
## Currency Pair Overview
– **Current Level:** AUD/USD hovers near 0.6450 in the Asian session, showing little momentum for a decisive move in either direction.
– **Recent Trend:** The pair remains inside a familiar range, consolidating after a recent rally that was capped near the 0.6520 resistance level.
– **Short-Term Sentiment:** Trader caution prevails, with sideways action dominating ahead of risk events.
## Impact of Chinese Economic Data
The Australian dollar’s fortunes are closely tied to China, as Australia is a significant exporter of raw materials and commodities to the world’s second-largest economy. Therefore, Chinese economic releases often have a pronounced impact on the AUD/USD exchange rate.
### Key Chinese Data Released:
1. **Caixin Services PMI (October 2024)**
– **Actual:** 50.4
– **Forecast:** 50.8
– **Prior:** 50.2
– **Significance:** While the reading is still just above the 50 threshold that signals expansion, it reveals subdued growth momentum in China’s service sector. The result fell short of expectations and underscores ongoing challenges facing China’s post-pandemic recovery.
2. **Caixin Composite PMI (October 2024)**
– **Actual:** 50.0
– **Prior:** 50.9
– **Significance:** The composite output index exactly at the 50 level signals neither contraction nor growth, highlighting a stalling recovery across manufacturing and services.
#### Additional Details and Analysis:
– China’s official NBS Manufacturing PMI released earlier in the week slipped back into contraction territory at 49.5, missing forecasts and demonstrating further slack in factory activity.
– Service sector activity is more resilient than manufacturing, but both are facing headwinds such as sluggish consumer spending, weak external demand, ongoing property sector challenges, and high youth unemployment.
### Market Impact:
– The softer PMI data sparked immediate selling pressure on the Aussie dollar. Investors are increasingly concerned that a stalling Chinese recovery will dampen demand for Australian exports, especially iron ore and coal, which are cornerstones of the Australian economy.
– The lack of upside follow-through for AUD/USD is attributed to ongoing skepticism about the pace and sustainability of China’s economic recovery for the rest of the year.
## Broader Market Cues and the US Dollar
Read more on AUD/USD trading.