Australian Dollar Snaps 3-Day Win Streak
The Australian dollar slipped to approximately $0.660 on Wednesday, halting a three-session winning streak, as investors processed underwhelming economic figures. In September, Australia's manufacturing sector continued its expansion, albeit at a reduced rate. While there was a modest improvement in industry activity, it remained in a state of contraction due to subdued demand, increasing costs, and labor shortages affecting businesses. Additionally, global sentiment stayed cautious regarding the risk of a US government shutdown, following Congress’s failure to pass funding legislation. The commodity-linked Australian currency faced further pressure as oil prices dipped over 1% on the anticipated increase in OPEC+ production. However, elevated bullion prices helped cushion the losses. On the policy side, the Reserve Bank of Australia (RBA) maintained steady interest rates, yet adopted a hawkish stance on inflation, lowering expectations for an immediate rate cut. Markets currently predict only a 40% chance of a rate cut in November, with potentially just one further easing on the horizon, as the central bank awaits third-quarter inflation data.
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