AUD Under Pressure as PMI Slows and Fed Hints at Further Rate Hikes

The Australian Dollar remains under pressure as the September preliminary S&P Global Purchasing Managers' Index (PMI) data for Australia showed a slowdown in key sectors. The PMI for manufacturing fell into contraction territory at 49.3, down from 52.0 previously, while the services PMI eased to 51.4 from 53.2.

As a result, Australia's Composite PMI dropped to 50.8 from its prior reading of 52.7. This weakness has further compounded pressure on the AUD/USD pair, which is trading around 0.7110 during Asian hours on Wednesday.

The US Dollar (USD) continues to strengthen, driven by the Federal Reserve's hawkish policy outlook. The US central bank recently raised its benchmark interest rate target by 25 basis points to the 3.75%, 4.00% range, with policymakers signaling 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 as traders turn their attention to the upcoming preliminary US PMI data release later on Wednesday.