The AUD/USD pair is currently trading in a stable manner around 0.6540 during the early hours of trading in Asia on Tuesday. Weaker-than-expected US economic data and increasing expectations for a US interest rate cut in December have led to a decline in the US Dollar against the Australian Dollar. Market participants will pay close attention to the Australian Gross Domestic Product data for the third quarter, set to be released on Wednesday.
AUD/USD remains steady at approximately 0.6540 during the early hours of Tuesday’s Asian session. We are observing softer economic data emerging from the US, coupled with additional indications from Federal Reserve officials that bolster the optimism surrounding potential rate cuts. The Australian Q3 Gross Domestic Product report is set to be the focal point later on Wednesday. A resurgence in expectations for rate cuts from the US Federal Reserve applied some downward pressure on the Greenback over the past week. Additionally, the disappointing US Manufacturing Purchasing Managers Index published on Monday could potentially weaken the USD and provide support for the pair. On Monday, the Institute for Supply Management announced that the US Manufacturing PMI fell to 48.2 in November, a decrease from 48.7 in October. This reading fell short of the market consensus of 48.6.
Later on Wednesday, attention will be focused on Australia’s GDP report. Economists project that the Australian economy will expand by 0.7% quarter-on-quarter during the three months ending in September, marking the most robust performance since late 2022. The annual GDP is anticipated to grow by 2.2% over the same timeframe, bolstered by the RBA’s easing measures implemented earlier this year. A stronger-than-expected outcome could potentially elevate the Aussie against the US dollar in the short term.
Conversely, weaker economic indicators from China may exert pressure on the Australian dollar, given China’s significant role as a trading partner for Australia. Data released by RatingDog on Monday indicated that China’s Manufacturing PMI unexpectedly declined to 49.9 in November, compared to 50.6 previously. This figure fell short of the market consensus of 50.5. A reading exceeding the 50 benchmark level indicates expansion, whereas a reading below that signifies contraction.