- AUD/USD slips below 0.6650 amid US Dollar’s recovery.
- The US Dollar rebounds even though the Fed’s rate-cut prospects for September edge higher.
- Market speculation for the RBA tightening policy further has strengthened.
The AUD/USD pair falls to near 0.6635 in Monday’s European session. The Aussie asset is expected to witness more downside as the US Dollar recovers despite slight improvement in expectations that the Federal Reserve (Fed) will start reducing interest rates from the September meeting
The CME FedWatch tool shows that traders see a 52% for the central bank announcing a rate-cut move in September, which has improved from 49% recorded a week ago. Mild recovery in the Fed rate-cut speculation for September is driven by weak revised estimates for Q1 Gross Domestic Product (GDP) and slower Personal Spending growth for April.
The United States Q1 GDP grew by 1.3%, slower than preliminary estimates of 1.6%. US Personal Spending grew at a slower pace of 0.2% from the estimates of 0.3% and the former release of 0.7%. Consumer spending accounts for two-thirds of the US economic activity. Weak data has raised doubts over the US maintaining its strong economic outlook in the long-run.
In today’s session, investors will focus on the US ISM Manufacturing PMI for May, which will be published at 14:00 GMT. The factory data is estimated to have improved to 49.8 from the former reading of 49.2. However, a figure below the 50.0 threshold is considered as contraction.
Meanwhile, the near-term outlook of the Australian Dollar remains strong as investors hope that the Reserve Bank of Australia (RBA) could announce one more interest rate-hike due to stubbornly higher inflation data.
This week, the Australian Dollar will be guided by the Q1 GDP data, which will be published on Wednesday. The Australian economy is estimated to have expanded at a steady pace of 0.2%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

Gold hovers around all-time highs near $3,250
Gold is holding steady near the $3,250 mark, fuelled by robust safe-haven demand, trade war concerns, and a softer-than-expected US inflation gauge. The US Dollar keeps trading with heavy losses around three-year lows.

EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines
The EUR/USD pair retreated further from its recent multi-month peak at 1.1473 and trades around the 1.1300 mark. Wall Street manages to advance ahead of the weekly close, despite escalating tensions between Washington and Beijing and mounting fears of a US recession. Profit-taking ahead of the close also weighs on the pair.

GBP/USD trims gains, recedes to the 1.3050 zone
GBP/USD now gives away part of the earlier advance to fresh highs near 1.3150. Meanwhile, the US Dollar remains offered amid escalating China-US trade tensions, recession fears in the US, and softer-than-expected US Producer Price data.

Bitcoin, Ethereum, Dogecoin and Cardano stabilze – Why crypto is in limbo
Bitcoin, Ethereum, Dogecoin and Cardano stabilize on Friday as crypto market capitalization steadies around $2.69 trillion. Crypto traders are recovering from the swing in token prices and the Monday bloodbath.

Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.