The Australian dollar fell against the US dollar today after a string of PMI readings from China, Europe and the UK all showed a contraction in the manufacturing sector.

China, the biggest consumer of Australian resources, saw its official PMI figure fall to 49 in November from 50.4 the previous month, while the HSBC China PMI reading dropped to a two-and-a-half year low of 47.7 in November from October's 51. The data cast worries that the demand in commodities would fall, adding downward pressure on the commodity-based currency itself. Markets have also grown increasingly worried that Beijing's economy was slowing after China's surprising easing of bank reserve requirements yesterday, which was seen as the first step in a cycle of looser policy to support economic growth.

The currency was further hit by disappointing Australian retail sales data, which increased less than expected in October, while approvals to build new homes suffered a second month of very heavy falls. The data added to the case for another cut in interest rates next week.