AUD/USD weakens toward 0.6500 as US Dollar gains despite soft PPI

The Australian Dollar (AUD) extends its decline against the US Dollar (USD) for the fourth straight session.
AUD/USD trades near 0.6500 during the American session, down over 1% on the week.
The headline PPI came in flat for June, while Core PPI also missed expectations.

Vishal Chaturvedi FXStreet

The Australian Dollar (AUD) extends its losing streak against the US Dollar (USD) for the fourth consecutive session on Wednesday, weighed down by renewed strength in the Greenback. The US Dollar is edging higher despite softer-than-expected US Producer Price Index (PPI) data, as traders remain cautious amid persistent inflation concerns and escalating tariff threats from the United States.

The AUD/USD pair is edging lower during the American trading hours. At the time of writing, the pair is trading near the key psychological support level of 0.6500, down over 1% so far this week. Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, refreshes its three-week high, holding around the 98.80 mark.

US PPI data released on Wednesday came in softer than expected, reinforcing signs of moderating inflation at the producer level. Headline PPI was flat on a monthly basis in June, missing forecasts of a 0.2% rise and slowing from the previous 0.3% increase. On an annual basis, PPI eased to 2.3% from 2.6% in May.

Meanwhile, Core PPI, which excludes food and energy, printed at 0.0% MoM versus 0.2% expected and slipped to 2.4% YoY from 2.6%.

Despite the weaker data, markets seemed to ignore the downside surprise, as traders stayed focused on the latest Consumer Price Index (CPI) report, which showed that inflation remains sticky. Cautious commentary from Federal Reserve officials has also kept expectations for an imminent rate cut in check. Combined with rising global trade tensions, these factors are helping support the US Dollar despite the softer PPI reading.

On the Australian side, weak economic data continues to put pressure on the Aussie. Consumer Confidence remains low, with the ANZ-Roy Morgan index falling deeper into negative territory in July. The economy grew by only 0.2% in the first quarter, showing signs of slowing down. At the same time, inflation has cooled and is now near the lower end of the Reserve Bank of Australia (RBA) 2-3% target. These signs have increased market expectations that the RBA could cut interest rates at its next meeting.

Looking ahead, all eyes will be on Australia’s jobs report and US Retail Sales data, both due on Thursday. The Australian employment figures could influence the Reserve Bank of Australia's next move, especially if the data signals further weakness in the labor market. Meanwhile, US Retail Sales will provide fresh insight into consumer spending. Strong numbers may further support the US Dollar, while weaker data could ease some of the upward pressure.

Economic Indicator

Employment Change s.a.

The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.

AUD/USD remains under presure above 0.7000; focus on data

AUD/USD has met some renewed selling pressure on Thursday, coming down from tops near 0.7040 to revisit the 0.7000 region ahead of the opening bell in Asia. The pair’s daily decline has come despite a lacklustre performance in the Greenback at the time when investors continued to monitor developments from the Middle East. Looking ahead, the release of flash PMIs will grab the attention in Oz at the end of the week.

USD/JPY declines to a one-week low; eyes trading range support near 157.50 on weaker USD

USD/JPY drops to a one-week low during Thursday’s Asian session, with bears now awaiting a break below multi-week range support near mid-157.00s before placing fresh bets amid a broadly weaker US Dollar. Despite bets for a December Fed rate hike and Middle East jitters, the recent decline in US bond yields keeps USD depressed near a three-week low. Moreover, hawkish BoJ expectations and intervention risks underpin the Japanese Yen, further weighing on the currency pair.

Gold remains offered just above $4,000

Gold prices resume their decline on Thursday, easing toward the area of two-month lows around $4,050 per troy ounce. Higher crude oil prices have reignited speculation of further tightening by the Fed, supporting the US Dollar and weighing on the precious metal.

The estimates keep falling: Why Bitcoin's quantum countdown is accelerating

The threat that Artificial Intelligence (AI) and quantum computing pose to Bitcoin (BTC) and cryptocurrencies in general is no longer a matter of if hardware will catch up; it is a matter of when. Advances in AI-assisted research are adding a new dimension to the quantum computing threat, although neither technology can currently break Bitcoin’s cryptography on its own.

The Bank of England just got its clearest reason to hike. Here's what it's really watching

UK inflation as measured by the CPI accelerated to 3.5% YoY in September, up from 3.1% in August, according to the Office for National Statistics. This is the highest level since October 2025, exceeding economists' expectations of 3.4% and pushing inflation further from the BoE's 2% target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.