The Australian dollar plunged after the central bank cut its official cash rate citing a need to spur the economy and encourage a weaker exchange rate, with the move coming after a downbeat Caixin manufacturing PMI survey on China.
The RBA cash rate decision saw a surprise 25 basis point cut to a record low 1.75%.
Earlier, the Caixin Manufacturing PMI for April came in at 49.4, below the 49.9 expected.
“The Caixin China General Manufacturing PMI for April came in at 49.4, down 0.3 points from March’s reading. All of the index’s categories indicated conditions worsened month-on-month, with output slipping back below the 50-point neutral level. The fluctuations indicate the economy lacks a solid foundation for recovery and is still in the process of bottoming out. The government needs to keep a close watch on the risk of a further economic downturn,” Caixin Insight Group chief economist He Fan said.