The Australian dollar faltered from near a two-month top on Friday after a contraction in factory activity in the country's top trading partner China dented risk appetite, although the currency was still on track to end the week with handy gains. The Aussie, a liquid proxy for Chinese assets, skidded 0.5 percent after the Caixin/Markit index of manufacturing fell to its lowest since February 2016.
That gauge of factory activity was more downbeat than the official version of the index and fanned fears of a steeper slowdown in the world's second-biggest economy. The Aussie was last at $0.7239 from Thursday's $0.7295, a level not seen since early December.
Despite Friday's losses, the currency is up 0.8 percent so far this week after jumping more than 3 percent in January - its second best month in a year. The New Zealand dollar was last off 0.2 percent at $0.6910. It is so far up 1 percent this week. Weighing on the Aussie, data on Friday showed Australia's property market remained in a downward spiral with the pace of declines quickening.
"Prices have now fallen by 7.6 percent from their peak in July 2017, which puts the current downturn on the cusp of becoming the largest on record in Australia," said Ben Udy, Singapore-based economist for Capital Economics.
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