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AUD/USD: Private Sector PMIs and RBA Rate Expectations
Since Tuesday’s RBA rate cut, Aussie economic indicators have challenged bets on further policy easing. Recent AUD/USD trends highlight how economic data has influenced expectations for RBA policy.
On February 21, Australian private sector PMI data could further lower RBA rate cut expectations. The S&P Global Services PMI increased from 51.1 in January to 51.2 in February. The February survey revealed:
- Staffing levels increased across the services sector.
- Input cost inflation accelerated, with firms citing rising wage costs.
- Output prices rose at a softer pace in February as firms resisted passing costs to consumers.
Although output price trends leave a second H1 2025 RBA rate cut on the table, the labor market, wage trends, consumer spending, and US-China trade risks remain key drivers.
For a comprehensive analysis of AUD/USD trends and trade data insights, visit our detailed reports here.
Australian Dollar Daily Chart
In the US session, a higher Services PMI, rising employment, and increasing prices could sink Fed rate cut bets. A widening of the US-Aussie interest rate differential, favoring the US dollar, may push AUD/USD toward the $0.63623 support level.
Conversely, a lower PMI, drop in job creation, and falling prices could narrow the rate gap, potentially driving AUD/USD toward the 200-day EMA and $0.65.
Beyond the economic data, US trade policies will play a crucial role. Given Australia’s trade-to-GDP ratio exceeds 50%, sweeping tariffs could impact Aussie exports, weighing on AUD demand.
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