AUD/USD Reclaims 0.6500 as US Dollar Weakness Overrides Dovish RBA

AUD/USD Rebounds Above 0.6500 on USD Weakness and Risk Sentiment

Aussie Dollar Hits One-Week High

The Australian Dollar (AUD) is up for the second straight day, with AUD/USD climbing above 0.6500 in early Thursday trading. The pair reversed earlier losses and reached weekly highs, despite dovish domestic signals like soft GDP and cautious Reserve Bank of Australia (RBA) rhetoric.

View More: See live AUD/USD movement on our Forex Tracker.

USD Dragged by Weak Data and Recession Fears

The US Dollar (USD) remains under pressure after a sharp decline in ISM Services PMI to 49.9, alongside ADP employment gains that missed expectations (37K vs. 115K forecast). These figures amplified concerns over the health of the US economy, especially ahead of Friday’s Nonfarm Payrolls (NFP) report.

Tariff Uncertainty Adds to USD Selling Pressure

Further weighing on the Dollar, former President Donald Trump ramped up rhetoric on trade, saying negotiations with Chinese Premier Xi Jinping were “extremely hard.” Simultaneously, tariffs on Steel and Aluminum were increased to 50%, escalating tensions and casting doubt on global trade prospects.

Insight: Learn how trade policy impacts the Aussie in our AUD & Trade Outlook.

Market Ignores Soft Australian GDP and RBA Dovishness

Interestingly, the market shrugged off Wednesday’s weaker-than-expected Australian GDP, as well as continued dovish signals from the RBA. Traders instead chose to focus on global risk drivers, such as the USD trajectory and broader macro themes.

What to Watch

• Will AUD/USD extend gains toward 0.6540/0.6560 resistance?
• Can upcoming NFP data halt USD selling pressure?
• Will RBA tone shift if Aussie inflation picks up in Q3?