Daily digest market movers: Aussie's rally slackens despite strong PMIs, policy divergences to limit the losses
- Softening US labor market data and soft S&P PMIs suggest that the Fed may follow a less assertive footing, leading to a potential depreciation of the USD.
- In contrast, preliminary August PMIs from Australia exhibit a stout picture of the economy.
- Manufacturing rose to 48.7 in contrast to 47.5 in July, Services scaled to 52.2 versus 50.4 in July, and the composite climbed to 51.4 in comparison to 49.9 in July. This development corroborates the RBA's hawkish policy disposition.
- Despite promising Australian data, the path of the pair will continue to be guided by incoming data from both countries.
- In the meantime, markets are extremely confident about a September cut by the Fed in September.
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