The AUD\/USD pair stabilises around mid-0.6500s, following China’s disappointing PMI figures over the weekend. Despite this, there is support from differing Fed-RBA policy expectations and a recent breakout through the 100-day SMA.<\/p>\n
China\u2019s official Manufacturing PMI recorded its eighth month below the 50.0 mark in November, indicating contraction. The Non-Manufacturing PMI dropped to 49.5, the lowest since December 2022, marking the first contraction in almost three years.<\/p>\n
The immediate market reaction was short-lived due to easing trade tensions and government measures to boost consumption in China. A weaker US Dollar, alongside reduced expectations for further RBA policy easing, supports the Australian Dollar.<\/p>\n
The USD Index remains near a two-week low with expectations of a Federal Reserve interest rate cut. Positive sentiment in the financial markets weakens the USD, benefiting riskier assets like the AUD\/USD.<\/p>\n
Technically, the breakout above the 100-day SMA supports further appreciation of the AUD\/USD. Traders remain cautious and await forthcoming US macroeconomic data, including the ISM Manufacturing PMI, for further direction.<\/p>\n
The NBS Non-Manufacturing PMI, gauging China’s service sector, the survey of executives indicates changing trends, with expansions above 50 and contractions below. The recent reading of 49.5 suggests a downturn, impacting the Renminbi.<\/p>\n
We are seeing the AUD\/USD hold its ground just under the 0.6550 mark, which is a sign of strength considering the weak Chinese economic data from the weekend. The market appears more focused on the divergence between an unmoving Reserve Bank of Australia and a Federal Reserve that is expected to cut interest rates. This policy difference is creating a supportive floor for the currency pair.<\/p>\n
The weakness in the US Dollar is the main story, driven by growing certainty of a Fed rate cut this month. Looking back at October’s inflation report in 2025, which showed US CPI cooling to 2.9%, we see why futures markets are now pricing in an over 90% chance of a rate cut at the December 17th meeting. This expectation is keeping pressure on the dollar and lifting risk-sensitive currencies like the Aussie dollar.<\/p>\n
In contrast, the RBA is staying put, as Australia’s own inflation has remained sticky, with the latest monthly indicator from earlier in 2025 holding at 3.8%. This policy divergence, where one central bank is easing while the other holds firm, is a classic bullish signal for the AUD\/USD. It suggests that interest rate differentials will increasingly favor the Aussie dollar in the coming weeks.<\/p>\n
However, the Chinese data cannot be ignored, as the Non-Manufacturing PMI’s dip to 49.5 marks its first contraction since the reopening recovery began back in December 2022. To position for potential AUD\/USD upside while protecting against a China-led downturn, traders could consider buying call options. This strategy allows for participation in a rally while capping potential losses if the Chinese economic situation worsens.<\/p>\n
From a technical standpoint, the breakout above the 100-day simple moving average last Friday is a significant bullish development. We should now view that level, around 0.6520, as a key area of support. As long as the pair remains above this mark, the path of least resistance appears to be towards the next major resistance level near 0.6650.<\/p>\n
Before placing aggressive bets, we must watch for the US ISM Manufacturing PMI data due out later today. A weaker-than-expected number would reinforce the US slowdown narrative, likely pushing the AUD\/USD higher. A surprisingly strong reading could trigger a temporary pullback, which might offer a more attractive entry point for those betting on the longer-term trend.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD steadies amid weak China PMI, supported by Fed-RBA policy divergence and 100-day SMA breakout.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-35611","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=35611"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=35611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=35611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=35611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}