AUD/USD Breaks 0.6500 as Traders Eye China PMI and Dovish Fed

AUD/USD Surges Above 0.6500 as Markets Eye Chinese PMI and Fed Outlook

(H2) AUD/USD Breaks Higher Amid USD Weakness

The AUD/USD currency pair rallied above the 0.6500 mark during early Monday Asian trading, reaching around 0.6535, as the US Dollar (USD) weakened due to rising trade uncertainty and growing market expectations for Federal Reserve rate cuts.

(H2) Trump Trade Policy Doubts Pressure the USD

Despite White House advisers hinting at imminent trade deals with over a dozen major US trading partners by July 9, markets remain skeptical. Bloomberg reported these developments on Friday, but lingering doubts around meeting the deadline contributed to a dip in the USD.

This uncertainty continues to cast doubt over the administration's commitment to meaningful global trade reforms, creating a tailwind for AUD/USD.

(H2) Dovish Fed Expectations Add to USD Pressure

The Federal Reserve is widely expected to maintain its policy rate at its late July meeting. However, weak US economic indicators have prompted traders to raise bets on multiple rate cuts in 2025, possibly sooner than initially projected. This dovish outlook continues to undermine the US Dollar.

(H2) Chinese PMI Data in Focus

Traders now await the release of China’s NBS Manufacturing PMI for June, which is due later today. As Australia’s largest trading partner, China’s economic performance has a significant influence on the Australian Dollar, and a stronger-than-expected PMI could provide further upward momentum to the AUD/USD pair.