The ongoing trade war with the US continues to wreak havoc on China’s manufacturing sector, with factory activity contracting for the sixth consecutive month in October. According to data released by NBS, China’s official manufacturing PMI declined to 49.3 in October from 49.8 in September, still below the 50-threshold indicating contraction.

The decline was driven by a steep fall in new export orders for the 17th straight month, with its index touching 47.0 from 48.2 in September. After a slight indication of growth in the previous month, total new orders, which includes both export and domestic orders, also slipped into contraction. Employment in factories improved slightly in October from September, but still remained in contraction, with its sub-index reading coming in at 47.3 in October from 47.0 in September.

The Chinese economy is likely to come under additional pressure over the weakness in the services sector. Although still in expansion, the pace of growth has slowed down considerably. The official services PMI slipped to 52.8 in October from 53.7 in September, the lowest level since February 2016.

On the release of this news, the Chinese yuan has not showed much reaction, with USD/CNH trading weak around 7.039 at the time of writing. The weakness in the dollar appears to be dominating the moves in this forex pair for now.