AUD/USD Pressured as China Industrial Profit Growth Slows to 7-Month Low 11.2%

Chinese industrial profit growth decelerated sharply to an 11.2% annual pace, a seven-month low and well below the 18.7% clip recorded in the first half of the year. The clear deceleration across both the July print and the seven-month cumulative figure raises questions over whether the AI-driven turnaround in Chinese industrial profitability is fading rather than simply normalising off a strong base. The data is a negative signal for the China-linked currency complex, with AUD/USD and NZD/USD most directly exposed given Australia's iron ore and bulk commodity leverage to Chinese industrial demand. Traders positioned for continued strength in China-exposed cyclicals and commodity demand may now reassess, potentially unwinding long antipodean exposure. USD/CNH could see mild upside pressure if the market interprets the slowdown as raising the odds of additional PBoC or fiscal support measures. For AUD/USD, softer commodity demand undermines the terms-of-trade support that has cushioned recent dips, leaving rallies vulnerable to selling unless follow-up Chinese activity data stabilises. Watch upcoming Chinese PMIs for confirmation of the trend.