**AUD/USD Holds Near 0.6450 after China’s PMI Data and Global Market Developments**
*Based on the original reporting by FXStreet; additional insights provided by current market research and financial news sources.*
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## Overview
The Australian dollar (AUD), paired against the US dollar (USD), has recently exhibited subdued performance, hovering near the 0.6450 mark. This consolidation follows the latest release of China’s Caixin Service PMI data, as well as a mixture of global and domestic events influencing market sentiment. Market participants are closely watching macroeconomic signals from China, the Reserve Bank of Australia’s (RBA) most recent policy meeting, and several US data releases, all of which are contributing to the current price action and trading environment.
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## Key Developments Affecting AUD/USD
### China’s Economic Indicators and Impact on AUD
– The AUD is commonly viewed as a proxy for Chinese economic health, due to Australia’s significant export ties with China, particularly in commodities like iron ore and coal.
– China’s Caixin Services Purchasing Managers’ Index (PMI) for October was released slightly below expectations at 50.4, compared to the previous reading of 50.2 and the market consensus of 51.3.
– A PMI above 50 signifies expansion, while below 50 signals contraction. The marginal increase, yet below expectations, suggested that the Chinese services sector is still struggling to gain robust momentum.
– Weaker Chinese data tends to weigh on the Australian dollar, as it raises concerns about demand for Australian exports.
### Reserve Bank of Australia (RBA) Policy Decision
– The RBA held its monetary policy meeting recently and, as anticipated by the market, kept the cash rate unchanged at 4.35 percent.
– The central bank, however, noted persistent uncertainty around the inflation outlook and global economic risks, stating that it is “not ruling anything in or out” regarding future rate moves.
– This ‘pause but vigilant’ stance has contributed to a wait-and-see approach among AUD traders.
– Economists at Australia and New Zealand Banking Group Limited (ANZ) and Westpac have both remarked that without clear signs of inflation peaking within target, the RBA may need to tighten once more in 2024.
### Broader Global Financial Market Context
– The US dollar has stabilized after a period of decline, in part due to reduced expectations of further interest rate increases from the Federal Reserve.
– Mixed US macroeconomic indicators, such as labor market data and ISM services PMI, have left traders uncertain about the timing and extent of any future Fed rate changes.
– Risk sentiment in global equities markets has been a mixed bag; modest gains on Wall Street have failed to translate into significant rallies in risk-sensitive currencies like the AUD.
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## Detailed Analysis & Recent Price Action
### Performance of AUD/USD
– After rebounding from lows near 0.6270 in late October, AUD/USD has climbed gradually, reaching near the
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