Aussie Dollar Weakens on Disappointing PMI Data

The Australian dollar weakened past $0.658 on Tuesday, reversing gains from the previous session, as investors weighed the underwhelming PMI data.

Flash estimates revealed that the composite PMI fell to 52.1 in September, from 55.5 in August. While this marked the twelfth straight month of expansion, it also signaled the slowest pace of growth in that stretch, with both the manufacturing (51.6 vs 53) and services (52 vs 55.8) sectors showing signs of deceleration.

Market focus is now on Wednesday’s Monthly CPI indicator, which will clarify if July’s inflation spike was due to ending electricity subsidies or broader price pressures.

If inflation stays high or accelerates, expectations for RBA rate cuts could be delayed well into next year.

Governor Michele Bullock noted Monday that while recent data have met expectations, the RBA remains alert to changing conditions.

She added that recent rate cuts should support spending, but global outlooks remain “uncertain and unpredictable.”