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- AUD/USD loses ground despite improved Australian preliminary S&P Global PMI data.
- Australia’s preliminary June Manufacturing PMI rose to 51.2, while Services PMI climbed to 49.9, signaling economic stabilization.
- The US Dollar holds ground amid a hawkish sentiment surrounding the Fed policy outlook.
AUD/USD extends its losses for the sixth consecutive day, trading around 0.6980 during the Asian hours on Tuesday. The pair remains subdued despite the release of improved preliminary Australian S&P Global Purchasing Managers Index (PMI) data. Traders’ attention is shifted toward domestic inflation and jobs data due later this week.
S&P Global showed on Tuesday that the preliminary reading of Australia’s S&P Global Manufacturing PMI rose to 51.2 in June versus 50.7 in the prior. Meanwhile, Services PMI climbed to 49.9 in June from the previous reading of 48.7, while the Composite PMI jumped to 49.8 in June versus 48.7 prior.
The AUD/USD pair falls as the US Dollar (USD) gains on a hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. The updated economic projections and commentary from Kevin Warsh, presiding over his first meeting as Fed Chair, surprised the market by leaning more hawkish than anticipated. As a result, futures traders have fully priced in a 25-basis-point rate hike for the September meeting, with some pricing in a minor probability of a tightening move as early as next month.
However, the Greenback may struggle amid easing risk aversion attributed to the ongoing peace talks between the US and Iran, which helped ease concerns about inflation. CNBC reported on Tuesday that US Vice President JD Vance noted that negotiations have made “great progress,” despite some underlying friction.
