Australia’s private-sector pulse softened in September, with S&P Global’s preliminary Manufacturing PMI slipping to 49.3 from 52.0. Services activity also cooled, as the Services PMI edged down to 51.4 versus 53.2 previously, while the Composite PMI eased to 50.8 from 52.7. The readings indicate manufacturing moved back below the 50 threshold, while services and the broader composite remained in modest expansion.
Australian Dollar Response and Key Drivers
In markets, the PMI release had little to no impact on the Australian Dollar, with AUD/USD trading lower around 0.7115. The currency’s longer-run drivers include interest-rate settings from the Reserve Bank of Australia, which targets inflation of 2-3% and can also deploy quantitative easing or tightening. External factors matter too: iron ore, Australia’s largest export, was valued at $118 billion a year based on 2021 data, and demand from China is central given its role as Australia’s biggest trading partner, alongside shifts in inflation, growth and the trade balance.
