The Australian Dollar (AUD) extended its losing streak against the US Dollar (USD) for a fourth consecutive session on Wednesday, pressured by a strong Greenback and weak domestic fundamentals. The AUD/USD pair edged lower during the American trading hours, trading near the psychological support level of 0.6500, down more than 1% this week.

Despite the release of softer-than-expected US Producer Price Index (PPI) data for June, the US Dollar Index (DXY) continued to climb, reaching a three-week high around 98.80. Headline PPI came in flat month-over-month, missing expectations of a 0.2% increase, while annual PPI slowed to 2.3% from 2.6%. Core PPI figures were also weak, showing 0.0% MoM growth, and 2.4% YoY, below market forecasts.

However, traders largely shrugged off the weak PPI results, instead focusing on the sticky US CPI inflation and cautious Federal Reserve commentary, both of which have kept hopes for an imminent Fed rate cut subdued. At the same time, rising global trade tensions, driven by escalating US tariff threats, have provided additional support to the safe-haven US Dollar.

On the Australian front, economic data has continued to disappoint. Consumer confidence further declined, as indicated by the ANZ-Roy Morgan index, and Q1 GDP growth remained sluggish at 0.2%. Inflation is also cooling, now sitting close to the lower bound of the RBA’s 2–3% target, increasing the odds of a potential rate cut in the coming months.

Looking ahead, the spotlight is on Thursday’s Australian employment report and US Retail Sales data, both of which are likely to inject fresh volatility into the pair. A weak Australian jobs print could solidify expectations for the RBA to ease, while strong US retail figures could reinforce USD bullish momentum.

Trade Idea:

Sell AUD/USD on rallies near 0.6530, targeting 0.6430, with a stop-loss at 0.6560, as weak Aussie data and Fed hawkishness weigh.