Australian Dollar tumbles amid stronger US PMIs, softer Australian data
AUD/USD tumbles 1.07% on Wednesday and trades around 0.7040 at the time of writing, pressured by a combination of a stronger US Dollar (USD) and disappointing activity data from Australia.
The Australian Dollar (AUD) has experienced a significant decline against the US Dollar (USD), trading around 0.7040 as of the writing, following weaker economic data and stronger US economic indicators. Preliminary S&P Global Purchasing Managers Index (PMI) data for September revealed a contraction in Australia's Composite PMI to 50.8, indicating a slowdown in the economy.
This news, coupled with stronger US PMI data, which showed a marked acceleration in private-sector activity, has put pressure on the AUD/USD exchange rate. The US S&P Global Composite PMI rose to 58.4, with both the Manufacturing and Services PMIs exceeding expectations, bolstering the US Dollar and further weakening the Australian Dollar.
As a result, the Reserve Bank of Australia (RBA) may face reduced expectations of interest rate hikes, which has contributed to the downward pressure on the AUD.
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