AUD/USD skids below 0.7500 on weak China PMI data, PCE inflation eyed

• AUD/USD has plunged below 0.7500 amid the underperformance of China Manufacturing PMI.
• A short-lived pullback in DXY is likely to find sellers soon.
• Going forward, US Core PCE inflation data will be the key event to watch out for.

The AUD/USD pair has remained lackluster this week amid a low trading range of around 82 pips as the asset awaits a potential trigger to continue marching towards the north. The major has displayed a negative double distribution trading session as the asset has slipped lower after forming a range at open and is auctioning back and forth again in a range of 0.7478-0.7486.

Aussie dollar has been hammered in the Asian session after the China Federation of Logistics and Purchasing (CFLP) reported a poor monthly Manufacturing Purchasing Managers Index (PMI) on Thursday. The monthly Manufacturing PMI printed at 49.5 lower than the estimate and previous print of 49.9 and 50.2 respectively. It is worth noting that Australia is a leading exporter to China and underperformance from Chinese economic indicators has eventually impacted the antipodean.

Apart from that, Australian Building Permits data has failed to underpin the aussie against the greenback. The monthly Building Permits data has landed at 43.5% much higher than the street projection of 10% and prior print of -27.9%.

While the US dollar index (DXY) has observed a short-lived pullback after plunging consecutively for two trading sessions. The DXY is oscillating in a narrow range of 97.68-97.94 ahead of the Core Personal Consumption Expenditure (PCE) inflation on Thursday. A preliminary estimate for monthly and annual Core PCE inflation is 0.4% and 5.5% respectively.