AUD Under Pressure as PMI Slows and Fed Hikes Interest Rates
The Australian Dollar (AUD) remains under pressure due to a slowdown in key sectors, including manufacturing and services. The latest Purchasing Managers' Index (PMI) readings showed that manufacturing fell into contraction territory at 49.3, while the services PMI eased to 51.4 from its previous reading of 53.2.
The composite PMI dropped to 50.8 from 52.7, contributing to the pressure on the AUD/USD pair. Meanwhile, a strengthening US Dollar (USD) driven by the Federal Reserve's hawkish policy outlook is also weighing on the AUD.
As the Fed raised its benchmark interest rate target by 25 basis points to the 3.75%-4.00% range, policymakers signaled another potential rate hike before the end of the year. The CME FedWatch Tool indicates a nearly 89.2% probability of a December rate increase.