AUD/USD appreciates to near 0.6550 following MI Inflation Gauge, China’s NBS PMI data
AUD/USD edges higher as TD-MI Inflation Gauge rose 0.1% MoM in June, against a 0.4% previous decline.
China’s NBS Manufacturing PMI climbed to 49.7, while the Non-Manufacturing PMI increased to 50.5 in June.
The US Dollar may struggle due to the rising odds of the Fed delivering a rate cut in September.
AUD/USD gains ground after registering losses in the previous session, trading around 0.6540 during the Asian hours on Monday. The pair remains stronger following the release of economic data from Australia.
TD-MI Inflation Gauge edged up 0.1% month-over-month in June, reversing a 0.4% previous decline. The rise came even as both headline and underlying inflation continued to ease within the Reserve Bank of Australia’s (RBA) 2–3% target range.
Australia's Private Sector Credit climbed to 0.5% month-over-month in May, against the market expectations and the prior month's 0.7% rise. The slowdown was primarily due to a deceleration in business loans, which eased to 0.8% from 1% in April.
In Australia’s close trading partner, China, NBS Manufacturing Purchasing Managers' Index (PMI) advanced to 49.7 in June, compared with 49.5 in May. The data came in line with the market consensus in the reported month. The NBS Non-Manufacturing PMI rose to 50.5 in June versus May’s 50.3 and the expected 50.3 reading.
The AUD/USD pair also draws support from the subdued US Dollar (USD), driven by the increasing odds of the Federal Reserve’s (Fed) cutting interest rates at the September meeting. Data showed on Friday that US Personal Spending unexpectedly fell in May, the second decline this year. Meanwhile, US Personal income dropped by 0.4% in May, the largest decrease since September 2021.
Traders await key US labor data scheduled to be released later in the week to gain a further idea of the US Federal Reserve’s (Fed) policy outlook. The Nonfarm Payrolls (NFP) is expected to show 110,000 new jobs added, down from 135,000 in May. Markets currently estimate the range between a high of 140,000 and a low of 75,000. Moreover, Unemployment is anticipated to tick higher to 4.3% from 4.2%.
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