AUD/USD tests bearishness near 0.6350 on optimistic China GDP and US PMIs

AUD/USD picks up offers to trim intraday losses at 0.6365 after China announced optimistic Gross Domestic Product (GDP) numbers for the third quarter (Q3) during early Monday. However, negative sentiment, unpredictable markets, and pessimism surrounding Australia appear to present difficulties for Aussie pair purchasers.

China's Q3 GDP increased by 3.9% year-over-year compared to the market's projection of 3.4%, while September's Industrial Output increased by 6.3% compared to the market's forecast of 4.5%. In September, however, China Retail Sales slowed at 2.5% YoY from 3.3% market projections.

It should be emphasized, however, that suspicions that the Australian government may reduce growth predictions in the impending budget update have joined hawkish Fed bets and geopolitical concerns about China to weigh on the AUD/USD pricing recently.

Reuters reported that Australia's economic growth is set to drop substantially next financial year as increasing inflation reduces household expenditure, according to updated predictions to be released by Treasurer Jim Chalmers in Tuesday's budget. Elsewhere, ABC News reported that Ukrainian General Oleksandr Syrskiy cited nuclear war worries. Fears that Chinese President Xi Jinping will not hesitate to exacerbate geopolitical tensions with the United States over Taiwan have also weighed on the AUD/USD exchange rate.

In spite of this, S&P 500 Futures post intraday gains of 0.50 percent while US 10-year Treasury rates remain around 4.19 percent, extending Friday's losses from the 14-year high.

Earlier in the day, Australia's S&P Global Manufacturing PMI decreased to 52.8 from 53.5 in September and 52.5 as predicted by the market, while the Services PMI decreased to 49 from 50.6 and 50.5 respectively. This resulted in the S&P Global Composite PMI falling into contraction zone with a reading of 49.6 compared to the prior reading of 50.9.

Further, Reserve Bank of Australia (RBA) Assistant Governor (Economic) Christopher Kent underlines that the RBA board expects to boost interest rates further in the term ahead. According to Reuters, the policymaker also emphasized that the extent and timing of rate hikes will rely on incoming data.

In the future, AUD/USD traders will pay particular attention to the risk catalysts as well as the October US PMI preliminary numbers. Nevertheless, AUD/USD bears are likely to maintain control in light of the recent increase in hawkish Fed bets and geopolitical concerns.