Australia, NZ Dollars Fall As China PMI Hits 15-month Low

The Australia and the New Zealand dollars weakened against their major currencies in the Asian session on Friday, after data showed that China's manufacturing sector activity fell to a 15-month low score in July.

Data from Caixin and Markit showed that China's manufacturing sector continued to contract in July and at an accelerated pace, with a flash PMI score of 48.2. That was well shy of forecasts for a score of 49.7, and it was down sharply from 49.4 in June.

Meanwhile, the Asian shares also fell, tracking the negative lead from Wall Street overnight and the continued fall in commodity prices. The weaker Chinese factory data also dampened sentiment.

In other economic news, data from Statistics New Zealand showed that New Zealand had a merchandise trade deficit of NZ$60 million in June. That beat forecasts for a shortfall of NZ$100 million following the NZ$350 million deficit in May.

Thursday, the Australian dollar fell, as traders took some profits off the table, after a strong rally in previous deals. The aussie fell 0.29 percent against the U.S. dollar, 0.32 percent against the yen and 0.84 percent against the euro.

Meanwhile, the NZ dollar rose on Thursday, after the Reserve Bank of New Zealand reduced its Official Cash Rate as expected by some economists. The NZ dollar rose 0.76 percent against the U.S. dollar, 0.82 percent against the yen and 0.20 percent against the euro.

In the Asian trading today, the Australian dollar fell to a 6-year low of 0.7268 against the U.S. dollar and a 9-day low of 0.9482 against the Canadian dollar, from yesterday's closing quotes of 0.7349 and 0.9581, respectively. If the aussie extends its downtrend, it is likely to find support around 0.71 against the greenback, 0.94 against the loonie,

Against the yen and the euro, the aussie dropped to more than a 2-week low of 90.09 and a 7-month low of 1.5087, from yesterday's closing quotes of 91.09 and 1.4920, respectively. On the downside, 89.00 against the yen and 1.51 against the euro are seen as the next support level for the aussie.

The aussie slipped to a 10-day low of 1.1065 against the NZ dollar, from yesterday's closing value of 1.1124. The aussie may test support near the 1.07 region.

The NZ dollar also fell to an 8-day low of 1.6711 against the euro and a 4-day low of 81.32 against the yen, from yesterday's closing quotes of 1.6615 and 81.85, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.68 against the euro and 80.00 against the yen.

Against the U.S. dollar, the kiwi dropped to 1.6562 from yesterday's closing value of 1.6605. The kiwi is likely to find support around the 1.64 area.

Looking ahead, flash PMI reports from major European economies for July and U.K. BBA mortgage approvals for June are due to be released in the European session.

In the New York session, U.S. new home sales for June and flash Markit manufacturing PMI for July are slated for release.