AUD Holds Ground Amid China Data and Hawkish Fed Bets
The Australian Dollar (AUD) is trading around 0.7160 in Asian hours, holding onto its small gain after opening with a bearish gap.
China's August National Bureau of Statistics (NBS) Manufacturing PMI came in at 49.8, exceeding the market expectation of 49.7 and rising from 49.2 previously.
The Non-Manufacturing PMI remained unchanged at 49.0 in August, matching July's reading. The strong trade linkage between Australia and China means shifts in China's economic backdrop often reverberate through AUD performance.
The TD-MI Inflation Gauge rose to 4.8% year-over-year in August, compared with 4% in July, but the monthly reading eased to 0.5%, down from 1% in the prior month.
Market pricing now reflects a nearly 57.5% chance of at least a 25 basis points (bps) increase in the US Federal Reserve interest rate next month, up from 35% before Fed Chair Kevin Warsh's hawkish commentary at the Jackson Hole symposium.