AUD/USD Plummets to 0.7100 Ahead of Fed Decision

The Australian Dollar (AUD) has continued its downward trend, falling to around 0.7100 against the US Dollar (USD). This comes despite a broadly positive stance for AUD/USD due to the Reserve Bank of Australia's (RBA) hawkish policy bias and elevated domestic inflation.

Australia's economy is performing well compared to other G10 peers, with domestic demand and positive economic growth supporting its resilience. Business activity remained in expansionary territory in August, with the Manufacturing index unchanged at 52.0 and the Services index edging down to 53.2. Trade data also showed a positive surplus of A$1.923 billion in July.

However, growth figures were less encouraging, with Gross Domestic Product (GDP) expanding by 0.4% QoQ in the second quarter of 2026, up from 0.3%. Annual growth came in at 2.1%, down from the previous 2.5% yearly expansion.