AUD/USD holds positive ground above 0.6900 ahead of Chinese PMI data

• AUD/USD trades in positive territory for the third consecutive day near 0.6910 in Monday's early Asian session. 
• US headline PCE rose less than expected in August. 
• China's stimulus measures and the hawkish stance of the RBA underpin the Aussie. 

The AUD/USD pair extends its upside to around 0.6910 during the early Asian session on Monday. The rising bets for another oversized interest rate cut by the Federal Reserve (Fed) in November weigh on the US dollar (USD). The Chinese Purchasing Managers Index (PMI) reports for September are due later on Monday. 

The US inflation data, as measured by the Personal Consumption Expenditures (PCE) Price Index, eased more than expected to 2.2% YoY in August, paving the way for the US central bank to cut interest rates again in November, which drags the US Dollar (USD) lower broadly. On a monthly basis, the PCE Price Index increased by 0.1%, in line with the consensus. Meanwhile, the core PCE Price Index, which excludes the more volatile categories of food and energy, climbed by 2.7% YoY in the same period, matching market expectations. 

University of Michigan's Consumer Sentiment Index came in better than the estimations, rising to 70.1 in September from 66.0 in August. Investors are now pricing in nearly 52.8% odds of a 50 basis points (bps) interest rate cut in November, while the chance of a smaller quarter-point move stands at 47.2%, according to the CME FedWatch Tool. 

On the other hand, fresh China's stimulus measures continue to fuel the risk-on rally and boost the China-proxy Australian Dollar (AUD). Additionally, the hawkish stance of the Reserve Bank of Australia (RBA) contributes to the Aussie's upside. The RBA kept its cash rate at 4.35% for a seventh consecutive meeting and stated that the policy would need to stay restrictive to ensure inflation slowed.