AUD Steady as China’s Factory Data Boosts, Eyes on US Rate Cuts
The Australian dollar (AUD/USD) held near 0.6560 on Monday, after recovering earlier losses. The boost came from upbeat data out of China—China’s Caixin Manufacturing PMI rose to 50.4 in June from 48.3 in May, signaling a return to growth in the world’s second-largest economy. This is a positive sign for the Aussie, since Australia’s economy is closely tied to Chinese demand.
On the domestic front, Australia’s S&P Global Manufacturing PMI slipped slightly to 50.6 from 51.0. The drop was due to slower market demand and rising inventories, showing some weakness in the local manufacturing sector.
Meanwhile, the U.S. dollar index (DXY) continues to slide, as traders expect the Federal Reserve to cut interest rates soon. The greenback is also under pressure due to ongoing talks of U.S. tariffs on Chinese goods, adding to market uncertainty.
The Forex market is watching closely how these global cues play out. A stronger China and weaker USD typically support further upside in the Aussie.
Impact:
AUD/USD could gain more if China’s growth holds and Fed stays dovish. Trade war risks or weaker Aussie data might limit upside in the short term.