AUD/USD Forecast: Australian Dollar Slides Below 0.7100 as Weak PMI Meets Hawkish Fed

AUD/USD: near-term bias bearish, but employment data is the key test. The weaker September PMI—composite easing to 50.8 and manufacturing slipping into contraction—adds to evidence of slowing Australian activity. That could temper expectations for further RBA tightening beyond the rate increase markets reportedly anticipate for September 29, reducing support for the Australian dollar. At the same time, hawkish Fed expectations favor the US dollar, widening the policy-outlook headwind for AUD/USD.

The signal is not one-way: PMI remains just above the expansion threshold, and the expected RBA hike may still support AUD if Thursday’s employment report is resilient. A weak jobs result would reinforce the growth slowdown and could deepen pressure on the pair; a strong one could revive expectations of continued RBA tightening and challenge the bearish interpretation. Watch Australian employment, Fed commentary and US rate expectations, plus whether the PMI weakness persists in subsequent data.