AUD/USD supported as China PMI surges to 52.2, strongest since late 2020

AUD/USD is poised for upward pressure following a significantly stronger-than-expected Chinese private manufacturing PMI reading. China's RatingDog manufacturing PMI surged to 52.2 in April from 50.8 in March, marking the strongest factory reading since late 2020 and comfortably beating the 51.0 consensus forecast. The expansion was driven by surging output and new orders, while input costs hit a four-year high, signaling rising inflationary pressures within China's manufacturing sector. The official NBS manufacturing PMI also remained in expansion territory at 50.3. As Australia's largest trading partner, China's economic health directly influences the Australian dollar through commodity demand channels. The dual confirmation from both private and official PMI readings reinforces the narrative of a broadening Chinese economic recovery. Traders should monitor AUD/USD for potential gains, particularly if risk appetite strengthens on the back of this data. However, rising input costs in China could introduce complexity for the People's Bank of China's policy outlook, which may temper gains. USD/CNH may also face downward pressure as improved Chinese fundamentals support the yuan.