• The Australian Dollar gains ground due to a divergent policy outlook between the RBA and the Fed.
• China's Caixin Manufacturing PMI declined to 49.3 in September, down from August's 50.4 reading.
• Traders will likely focus on Fed Chair Jerome Powell’s speech on Monday.

The Australian Dollar (AUD) continues its winning streak for the third consecutive session on Monday. This upside follows the Purchasing Managers’ Index (PMI) data from China, Australia’s largest trading partner. Additionally, the rising expectations that the US Federal Reserve (Fed) may continue its policy easing in November is weakening the US Dollar and underpinning the AUD/USD pair.

China's Caixin Manufacturing Purchasing Managers' Index (PMI) fell to 49.3 in September, indicating contraction, down from 50.4 in August. Meanwhile, the Caixin Services PMI saw a significant decline, dropping to 50.3 from August’s 51.6 reading, reflecting a slowdown in the services sector.

The US Dollar received downward pressure following Friday’s US Core Personal Consumption Expenditures (PCE) Price Index data for August. The monthly index increased by 0.1% MoM, falling short of the expected 0.2% rise, aligning with the Federal Reserve's outlook that inflation is easing in the US economy. This has reinforced the possibility of an aggressive rate-cutting cycle by the Fed.

The CME FedWatch Tool indicates that markets are assigning a 42.9% probability to a 25 basis point rate cut by the Federal Reserve in November, while the likelihood of a 50-basis-point increase to 57.1%, up from 50.4% a week ago.