Australian Dollar weakens as US yields rebound, PMIs fail to impress

• AUD/USD retreats as US yields recover from buyback-driven lows.
• Solid jobless claims support Dollar ahead of US Flash PMIs.
• Australian PMIs stay expansionary, though services momentum softens.

The Australian Dollar retreated against the Greenback on Thursday as US bond yields resumed their advance, despite the US Treasury's efforts to cap elevated yields following its announcement of a long-end bond buyback program. The AUD/USD trades at 0.7114, down 0.14%.

AUD/USD retreats as Treasury yields recover, offsetting support from resilient Australian PMIs

When the US Treasury’s program was announced, the US 30-year yield fell, and it is now back at 5.25%, after reaching a low of 5.178% earlier in the day. The US Dollar Index (DXY), which tracks the Greenback’s value against six peers, is up 0.07% at 99.83.

Consequently, the AUD/USD soared sharply to a weekly high of 0.7132, before retreating.

Thursday’s economic docket in the US featured Initial Jobless Claims for the week ending August 15, and came at 206K, below forecasts and the previous print reading. 

Recently, the US Treasury Secretary Scott Bessent said, “We are announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation.” He said the U-turn in US yields is “noise” and that buyback operations “could be more than the $4 billion.”

Regarding the US – Iran conflict, US President Donald Trump said that the US is essentially and soon controlling the Strait of Hormuz, noting that Iran has some missiles and drones, but a low capacity to build. 

In Australia, the S&P Global Manufacturing PMI was 52 in August, unchanged from July’s data. At the same time, the S&P Global Services PMI for the same period decelerated from 53.6 to 52.9.

Eleanor Dennison, Economist at S&P Global Market Intelligence, said: “Positively, manufacturing enjoyed its strongest injection of new work since the start of the year, although disruption to supply chains and challenges on the cost front led to a slight drop in output. Services, meanwhile, maintained its growth path, but with rates of expansion in both activity and new business softening slightly compared to July.”

Ahead, the US economic docket will feature Flash PMIs, which are expected to slow, with the Manufacturing PMI projected at 53.8, down from 53.9, and the Services PMI forecast at 54.0, down from 54.6.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.7116. The pair holds above the latest simple moving average triple at 0.6997 and the short-term upward trend line breakpoint near 0.6975, keeping the near-term tone constructive. Price is advancing within a broader rising structure, although several upward trend line break levels between 0.7300 and 0.7311 sit overhead as the next barriers. The Relative Strength Index (14) around 64 leans bullish but not yet overbought, suggesting room for further gains while the spot remains supported above its underlying averages.

On the downside, immediate support is located at the current price area around 0.7116, followed by the clustered technical floor coming from the simple moving average triple at roughly 0.6997 and the shorter-term trend line break at 0.6975. A deeper slide would expose the former downward resistance trend line breakpoint near 0.6398 as a more distant structural base. On the topside, initial resistance is seen at the upward trend line break around 0.7300, with a slightly higher confluence zone near 0.7311; a sustained move above these levels would open the way toward the next trend-line-derived objectives around 0.8440 and 0.9162.

(The technical analysis of this story was written with the help of an AI tool. Know more.)