FX round-up: Emerging market currencies hit by weak Chinese data

America´s greenback ended on a higher note following weak figures on the state of China´s manufacturing sector with emerging market currencies left nursing the worst losses.

The US dollar spot index edged higher by 0.33% to 92.93 after hitting an intra-day low at 91.92, in the process setting a fresh 15-month low.

It was the Aussie that put in the worst showing among the most frequently traded currency pairs. The US dollar gained 2.62% against the Russian ruble to 14.64, 1.88% against the Brazilian real and 2.63% versus South Africa´s rand.

On Monday morning the Reserve Bank of Australia surprised a small majority of economists by cutting its cash rate by 25 basis points to 1.75%, justifying the move on the basis of a now weaker than expected outlook for inflation.

Data released first thing on Tuesday morning revealed the pace of growth in China´s manufacturing sector slowed unexpectedly in April.

Acting as a backdrop, the International Monetary Fund trimmed its growth projections for the region.

Caixin´s manufacturing PMI fell to 49.4 in April from 49.7 in March, missing economists’ expectations for a reading of 49.9. A reading below 50 indicates contraction.

For analysts at Capital Economics the weak reading had more to do with the difficulties inherent in attempting to adjust for the seasonal quirks in the data. Nevertheless, the dollar initially moved lower following the data.

Dollar/yen ended just 0.13% down on the day at 106.28, but traders initially took advantage of the holiday in Tokyo to push it as far down as 105.55.

Cable was the worst of the major currency pairs, coming off by 0.82% to 1.4552.

Euro/dollar drifted lower by just 0.17% to 1.1515, but only after an early morning swing to as high as 1.1617.