Aussie slips towards $0.70 on weak china data

The Australian dollar fell back towards $0.70 against the US dollar on Wednesday after a manufacturing index from Australia's biggest trading partner China came in weaker than expected. Further signs that the world's second-biggest economy is losing momentum emerged on Wednesday, pushing the Australian dollar lower on fears that Australia's economy will suffer as a result.

The Caixin-Markit China Manufacturing Purchasing Managers' Index (PMI) fell to a preliminary 47.0 in September from 47.3 last month, where a reading below 50 indicates a contraction in activity, while a figure above 50 signals expansion.

The AUD/USD pair tumbled 0.86% to $0.7020 on Wednesday afternoon in Sydney, from $0.7090 at the close of trade in New York on Tuesday just hours earlier, and traded down from $0.7075 before the manufacturing release.

China has long been Australia's biggest export destination, making the Australian dollar extremely susceptible to Chinese developments.

The New Zealand dollar, which is also closely linked to movements in China, fell 0.40% to $0.6257 after the release from $0.6301.