On Thursday, April 3, market attention turned to China’s economy following a stronger-than-expected Caixin Services PMI report and amid renewed concerns over US tariff measures announced by President Trump.
The Caixin Services PMI increased to a three-month high of 51.9 in March, up from 51.4 in February and higher than an expected 51.6. The March PMI survey revealed several key developments:
Dr. Wang Zhe, Senior Economist at Caixin Insight Group, remarked:
“Market optimism was maintained. The indicator for expectations of future activity measured lower than February but remained in expansionary territory. Service providers were hopeful about future policy support at home. However, some expressed concerns over a potentially deteriorating global trade environment.”
Financial markets responded swiftly to the PMI release, reflecting improving sentiment toward China’s economy.
Before the PMI data, the Hang Seng Index dropped to a low of 22,638. However, in response to the March PMI report, the Index briefly rose to a high of 22,962 before retreating to a post-report low of 22,826.
On Thursday, April 3, the Index was down 1.44% to 22,869 for the morning session. Concerns about President Trump’s tariffs overshadowed the upbeat PMI report.
In the forex market, the AUD/USD reacted positively to the PMI data, rising from $0.62799 to a post-report high of $0.62871. However, the pair quickly reversed, falling to a post-report low of $0.62744. Trump’s tariffs weighed on Aussie dollar demand. On April 3, the AUD/USD was trading 0.33% lower at $0.62752.
The Australian dollar remains sensitive to developments in China’s economy and US trade policy.
On Wednesday, April 2, President Trump announced sweeping tariffs affecting key economies, including China. Any rollback—particularly toward China—could lift risk sentiment, supporting the Aussie dollar and Asian equities. Conversely, retaliatory measures from China could fuel fears of a global trade war, impacting risk assets, including commodity currencies such as the Aussie dollar.
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With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.