China's Caixin services PMI for March came in at 42.0 vs. 53.0 expected and 50.2 last, showing that the country’s services activity contracted on coronavirus outbreak-induced lockdown measures.
China’s services activity falls at the quickest rate since February 2020 amid a notable drop in sales.
Wang Zhe, senior economist at Caixin Insight Group said, “The latest wave of the Covid-19 epidemic hit China’s services sector hard.”
“Both supply and demand in the services sector contracted sharply after the latest wave of Covid outbreaks started to take off in early March. The services PMI dropped to its lowest since February 2020, while the gauge of total new business dropped to its lowest since March 2020. Overseas demand remained weak, with the gauge of new export business falling to its lowest since October 2020,” he added.
AUD/USD drops further towards 0.7550
The downside surprise on the Chinese Services PMI numbers adds to the weight on the aussie dollar, as AUD/USD is testing daily lows, currently trading at 0.7527, down 0.09% on the day.