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AUD/USD slides toward 0.7000 as the US dollar rebounds
The pair drops 0.3% even as China’s July manufacturing PMI stayed above 50 and the RBA continues to leave room for another rate hike this year.
AUD/USD fell to around 0.7000 on Monday, down 0.3% on the day, as a rebound in the US dollar outweighed support tied to China’s economic data, according to FXStreet.
China’s RatingDog Manufacturing Purchasing Managers Index slowed to 50.9 in July from 51.7 in June, below the 51.5 consensus but still above the 50 expansion threshold. FXStreet also pointed to Reserve Bank of Australia commentary that keeps expectations for a restrictive policy stance in focus.
RBA Assistant Governor Sarah Hunter said inflation moderation was mainly driven by lower fuel prices, while underlying pressures remain above the RBA’s 2% to 3% target range, leaving markets pricing the possibility of another rate hike this year. At the same time, FXStreet said sentiment stayed cautious due to conflicting US and Iranian statements about planned military strikes and the Strait of Hormuz.
FXStreet added that investors are also weighing OPEC+ plans to increase production in September, which has weighed on oil prices and reduced expectations for further Fed tightening. Trading attention then shifts to the Institute for Supply Management Manufacturing PMI later Monday and Friday’s US nonfarm payrolls for fresh clues on the Fed’s next move.