AUD/USD Nears 0.6450 on Weaker US Dollar and Tariff Uncertainty

AUD/USD Nears 0.6450 as Weak US Dollar and Tariff Worries Lift Aussie

H1: AUD/USD Extends Gains Amid USD Weakness and Chinese PMI Support

The Australian Dollar (AUD) continued its positive momentum against the US Dollar (USD) in the early Asian session on Monday, with the AUD/USD pair rising to around 0.6445. The rally is being driven by broad USD weakness, tariff uncertainty, and positive sentiment from Chinese economic data.

H2: USD Pressured by Tariff Uncertainty

The US Dollar remains under pressure due to renewed concerns over tariffs, which are expected to impact economic growth and add inflationary pressure. According to Steve Englander, head of G10 FX research at Standard Chartered Bank (NY Branch):

"We're going to have some tariffing. Maybe not as exciting as was announced on April the 2nd, but we're still going to get it."

This sentiment is creating headwinds for the USD and lifting risk-sensitive currencies like the AUD.

H2: Chinese PMI Lends Support to AUD

China’s latest PMI data released by the National Bureau of Statistics (NBS) over the weekend showed a modest improvement in manufacturing:

• Manufacturing PMI rose to 49.5 in May (from 49.0 in April)
• Non-Manufacturing PMI dropped slightly to 50.3 (from 50.4), below the expected 50.6

The stronger-than-expected manufacturing reading signals resilience in China’s industrial sector, a key trading partner for Australia, thus offering indirect support to the Aussie Dollar.

Explore more in our China Economic Tracker.

H2: US ISM Manufacturing PMI in Focus

Markets are now awaiting the release of the US ISM Manufacturing PMI for May, which is expected later Monday. This data could either reinforce USD weakness or trigger a short-term reversal, depending on whether it beats or misses market expectations.

Stay updated with our US Economic Calendar.

H2: Key Takeaways

• AUD/USD trades near 0.6445, extending its recent gains
• Weak US Dollar sentiment persists amid tariff concerns
• China’s manufacturing PMI supports Aussie strength
• US ISM Manufacturing PMI due later Monday may drive volatility

🔗 Related Links on Tredu.com

• Forex Market Daily Outlook
• How Tariffs Impact Currency Markets
• AUD/USD Weekly Forecast