The Australian dollar has closed lower in response to weaker than expected Chinese data.
At 5pm today, the currency was trading at 102.79 US cents, down from 103.13 cents on Friday.
The Australian dollar touched its intraday low of 102.64 cents after data showed manufacturing activity in China hit a four-month low in February.
The HSBC preliminary purchasing managers' index (PMI) fell 1.9 index points in February to 50.4 index points.
Although it was the fourth consecutive month the index had been above the key 50 level that shows an expansion, the result was below what some market players had expected.
The Australian dollar fell from 102.98 cents before the data was released at about 12.45pm AEDT to 102.64 cents shortly afterwards, according to IRESS data.
Easy Forex senior currency dealer Francisco Solar said the report took the market by surprise.
"It pretty much goes against what we have been seeing with the PMI numbers," Mr Solar said.
"There was a notion in the market that this was a number that was improving.
"So for it to come back to hover just above the key 50 level, it just gave a little bit of a check to the market."
After the sharp decline the Australian dollar in afternoon trade pared back some of those losses, as some market players took the view the PMI may be a one-off.
And the Moody's decision to strip the United Kingdom of its AAA credit rating left Australia as one of a handful of economies left still holding the coveted top-notch rating.
"That makes the Aussie all that more attractive to overseas investors, which is why buying on the dip seems to be the norm when the Aussie gets sold off like we saw today," Mr Solar said.
"It is very hard to push the Aussie lower," he said.
