China's RatingDog Services PMI data: Australian Dollar maintains gains

• 50.8 was October’s reading for China’s RatingDog Services PMI. The Australian Dollar held steady despite the slight decline.
• Below-50.0 readings for Australia’s services and composite PMIs indicated a contraction in private-sector activity.
• Despite the RBA’s rate increase, US election uncertainty and the impasse in Iran peace talks pose downside risks.

AUD/USD trades near 0.6970. The pair is advancing during Wednesday’s Asian session after two days of declines. Its recent gains remain intact as the Australian Dollar (AUD) retains its strength following economic releases from China, Australia’s key trading partner. At 50.8 in October, China’s RatingDog Services Purchasing Managers’ Index (PMI) was down from September’s 51.6, indicating a modest slowdown in services expansion.

Weaker services activity and broader business conditions were evident in Australia’s economic data. October’s S&P Global Australia Services PMI came in at 48.5, down from 51.9 in September and the lowest in seven months. Although above the market forecast of 47.8, the reading slipped below the neutral 50.0 mark for the first time since May. The S&P Global Composite PMI also declined, reaching 48.2 from September’s 51.3. That exceeded the initial forecast of 47.7 but indicated a return to contraction across manufacturing and services.

Further ahead, headwinds may test AUD/USD’s current resilience. Uncertainty over the forthcoming US midterm elections, alongside deadlocked peace negotiations with Iran, continues to dampen investor sentiment. These concerns are eclipsing the Reserve Bank of Australia’s (RBA) latest interest rate increase.

The first exit polls are in focus as market participants assess whether Democrats will take control of the US House and Senate. They are also watching for US President Donald Trump’s response to the final election outcome.

G10 currency-specific drivers keep Dollar performance mixed

Currency-specific developments are drawing more investor attention than broad macroeconomic narratives, according to strategists at Scotiabank. They note that "G10 currencies continue to trade in mixed fashion as market participants focus on individual currency developments rather than broader themes," underscoring the increasing emphasis on individual currency drivers.