SYDNEY: The yen rose and Australian dollar tumbled on Wednesday after a survey showed Chinese factory activity fell to a 6-1/2-year low, clouding the outlook for global growth.
The preliminary Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) fell to 47.0 in September, the worst since March 2009 and below market expectations of 47.5.
The bleak reading of Chinese manufacturing activity reinforced concerns of a sharper-than-expected slowdown in the world’s second-largest economy and spurred selling of commodity currencies, while giving a boost to the safe haven yen.
The Australian dollar, which is seen as a liquid proxy for China plays, fell 0.9 percent to $0.7026 AUD=D3, pulling further away from a near four-week high of $0.7280 set on Friday.
Against the yen, the Aussie shed 1.2 percent to 84.14 AUDJPY=R.
The yen also gained ground against the U.S. dollar, with the greenback slipping 0.3 percent to 119.79 yen JPY=.
Against a basket of six major currencies, the dollar pulled back to 96.263 .DXY. Earlier on Wednesday, the dollar index had set a high of 96.484, its strongest level since Sept. 4.
The latest sign of slowing Chinese growth could increase the uncertainty over the possible timing of a U.S. Federal Reserve rate rise, analysts said, after the Fed held off from raising interest rates last week.
