AUD/USD Rises to 0.6550 After Inflation and PMI Data

AUD/USD Climbs Toward 0.6550 After Key Data from Australia and China

AUD/USD Recovers Amid Improved Inflation Readings

The Australian Dollar (AUD) rebounded from last session’s losses, pushing the AUD/USD pair close to 0.6550 during Monday’s Asian session. The recovery follows a better-than-expected reading in the TD-MI Inflation Gauge, which posted a 0.1% monthly increase in June, reversing a 0.4% drop in May.

Although headline inflation remains within the Reserve Bank of Australia's (RBA) 2–3% target range, the monthly uptick helped lift AUD sentiment.

Australian Private Credit Growth Slows

Australia’s Private Sector Credit rose 0.5% MoM in May, slightly down from April’s 0.7%. The deceleration was led by a slowdown in business lending, which slipped from 1.0% to 0.8%.

Despite this, the domestic data still supported the AUD as inflation appeared to stabilize and credit levels remained robust.

Chinese PMI Data Lifts Risk Appetite

Meanwhile, China’s NBS Manufacturing PMI came in at 49.7, in line with expectations, while Non-Manufacturing PMI climbed to 50.5 in June. The improvement in Chinese services activity gave a boost to risk-sensitive currencies like the AUD.

Fed Rate Cut Expectations Weigh on USD

The US Dollar (USD) remained under pressure as traders increasingly price in a potential Fed rate cut in September. Weak personal spending and income data from the US have led markets to bet on more than one rate cut by the end of 2025.

This macro backdrop supports the upward momentum in AUD/USD.