Australian dollar extends losing streak ahead of key economic data

Daily Currency Update

The Australian Dollar (AUD) continued its losing streak against the US Dollar (USD) for a third straight day on Wednesday, falling to its lowest level in three weeks before finding some stability. As of writing, the AUD/USD pair is trading around 0.6432, down over 0.30% for the session. This recent weakness in the Aussie comes despite a slight pullback in the US Dollar, highlighting that the downward pressure is largely being driven by local factors and broader market sentiment, rather than USD strength alone. Investors and traders are now closely watching for Thursday’s preliminary release of the S&P Global Australia Purchasing Managers’ Index (PMI), which will offer an early read on the health of the Australian economy for August. The PMI report covers key sectors like manufacturing and services and is considered a leading indicator of economic activity. If the PMI data disappoints—suggesting slowing growth or weak demand—it could reinforce concerns about Australia’s economic momentum, particularly amid global uncertainties and high interest rates. This would likely increase downside pressure on the AUD, potentially opening the door to further losses in the short term. However, if the data surprises to the upside and signals resilience in business activity, it could help stabilize the Aussie and even spark a short-term rebound. A stronger-than-expected reading may ease fears of a slowdown and give the currency some breathing room, especially with markets already pricing in a cautious outlook. For retail traders, this means upcoming data could create volatility in the AUD/USD pair. It’s a good time to stay alert, manage risk carefully, and be prepared for possible sharp moves depending on the PMI results. Whether you're trading short-term or watching for longer-term entry points, keeping an eye on the data and overall sentiment will be key in navigating the next move in the Aussie.