AUD/USD consolidates near three-week low as focus turns to Australia PMI preliminary release

AUD/USD consolidates near 0.6430 after hitting a three-week low.
The US Dollar eases as US President Donald Trump calls for Fed Governor Lisa Cook’s resignation, sparking political uncertainty.
Traders eye Thursday’s S&P Global Flash Australia PMI preliminary release for fresh signals on business activity, with a soft reading likely to weigh further on the Aussie.

Vishal Chaturvedi FXStreet

The Australian Dollar (AUD) extends its decline for the third consecutive day against the US Dollar (USD) on Wednesday, touching a three-week low before steadying. At the time of writing, AUD/USD is consolidating losses around 0.6432, down over 0.30% on the day, as the Aussie remains under pressure despite a softer Greenback.

The US Dollar is easing back from a one-week high, weighed down by renewed political tension in Washington after President Donald Trump publicly called for the resignation of Federal Reserve Governor Lisa Cook. The move has injected fresh uncertainty into the central bank’s policy outlook, prompting a retreat in the Dollar Index (DXY) and trimming some of the Greenback’s recent gains.

Adding to the pressure, the Federal Reserve’s (Fed) July meeting minutes showed that a majority of policymakers continued to view inflation risks as outweighing employment risks. Several participants noted that it would not be feasible to wait for complete clarity on the impact of tariffs before adjusting monetary policy, while others highlighted that the current federal funds rate may not be far above its neutral level.

Even so, the Australian Dollar has struggled to capitalize on the softer US Dollar backdrop. The currency remains vulnerable as investors assess the Reserve Bank of Australia’s (RBA) dovish tilt following this month’s rate cut to 3.60%, while sentiment toward China — the country’s biggest export market — was dented further after the People’s Bank of China opted to keep its benchmark lending rates unchanged earlier today.

The combination of domestic monetary easing, muted Chinese stimulus, and cautious global risk sentiment has kept the AUD under pressure. Focus now shifts to the preliminary release of the S&P Global Australia PMI on Thursday, which will provide an early snapshot of economic activity in August. A softer print could reinforce downside risks for the Aussie, while a stronger-than-expected outcome may offer some relief and help the currency stabilize after its recent decline.

Economic Indicator

S&P Global Composite PMI

The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging private-business activity in Australia for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Australian private economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for AUD.

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