ASX, AUD, NZD softer as NAB business conditions hit six-year low

The Australian and New Zealand dollars traded softer following disappointing domestic economic data that highlighted mounting pressures across Australasia. Australia's National Australia Bank (NAB) business conditions index dropped five points to -1 in August, marking its first negative reading since 2020. The decline was driven by a 10-point drop in profitability and a 5-point fall in sales to post-pandemic lows, while business confidence slipped to -8. Compounding the weak economic backdrop, the Westpac-Melbourne Institute consumer sentiment index fell 5.2% to 84.4 in September, with mortgage-holder sentiment tumbling 13%. Despite softening growth indicators, persistent cost pressures and rising fuel prices keep inflation elevated, with interest rate swaps pricing in a 68.8% probability of an RBA rate hike this month. Meanwhile, the ASX 200 fell 0.4% to slip below the 9,000 threshold to 8,979.70. Across the Tasman, the New Zealand dollar faced additional headwinds after RBNZ policymaker Prasanna Gai noted the Official Cash Rate may already be in neutral territory, dampening further tightening expectations.