Australian Dollar Tumbles Over 1% as Domestic Growth Slows and US Yields Soar Past 5%
| Pair | Now | Since publish |
|---|---|---|
| AUDUSD | — | — |
- AUD down 1% to 0.7040 on weak Aussie PMI, strong USD.
- Aussie private sector growth hits 3-month low (50.8 Composite PMI).
- USD rallies as US yields surge past 5%, Fed tightening fears.
Australia’s private sector growth decelerated to a three-month low in September, with the S&P Global Composite PMI falling to 50.8 from 52.7 in August. Manufacturing activity contracted, as its PMI dropped to 49.3 from 52.0, while the Services PMI eased to 51.4 from 53.2. This broad-based slowdown, marking the weakest expansion in the third quarter, presents mixed signals for the Reserve Bank of Australia ahead of its September 29 policy meeting. While softer demand and job cuts suggest a cautious stance, persistent increases in output prices, partly due to Middle East-driven fuel costs, keep inflation concerns alive. The Australian Dollar (AUD) remained under pressure following the release, with AUD/USD trading near 0.7110.
The Australian Dollar (AUD) extended its decline on Wednesday, falling over 1% against the US Dollar (USD) to trade around 0.7039-0.7040. This renewed pressure stemmed from a combination of factors: domestically, Australia’s preliminary S&P Global Composite PMI for September dropped to 50.8 from 52.7 in August, indicating a slowdown in private sector growth with manufacturing contracting and services slowing. Externally, the US Dollar strengthened significantly as US Treasury yields soared, with the 5-year and 10-year T-note yields surpassing the 5% threshold amid investor expectations of further Federal Reserve tightening. The US 5-year yield rose 17 basis points to 4.99%, and the 10-year T-note surged 15.5 basis points to 5.11%.