Forex
Australian Dollar Tumbles as Robust US Manufacturing Data Boosts USD
The Australian Dollar (AUD) weakened against the US Dollar (USD) on Monday after stronger-than-expected US ISM Manufacturing PMI data came in at 50.3 for January, up from 49.2 in December and above the 49.5 forecast.
This reading signaled a return to expansion in the manufacturing sector, prompting a rally in the US Dollar as traders pared back bets on a near-term Federal Reserve rate cut.
The probability of a 25-basis-point cut in March fell to 28% from 34% a week earlier, according to CME FedWatch.
As a result, AUD/USD dropped from a session high of 0.6720 to around 0.6690, marking a 0.3% decline on the day.