AUD Stalls Below $0.7170 as Traders Hesitate on USD

The Australian Dollar (AUD) has stalled below $0.7170 against the US Dollar (USD), mirroring its performance over the last two weeks. The AUD/USD exchange rate currently sits at $0.7160, following a Wednesday rebound from lows near $0.7120 that was capped at the 0.7170 area.

This comes as traders remain hesitant to bet against the US Dollar, fueled by hawkish comments from Federal Reserve Chairman Kevin Warsh at the Jackson Hole summit last week. Strategists at Scotiabank now see a 70% chance of the Fed raising interest rates by 25bps later this month, providing support for the USD amidst a risk-off tone.

The Australian Trade Balance data released earlier in the day revealed a narrowed surplus of $1.923 million in July, down from $2.341 million. Exports declined 3.3% following a 9.1% jump in June, offsetting a 2.5% drop in imports that follows a 0.7% decline in the previous month.

Meanwhile, China's RantingDog Services Purchasing Managers Index (PMI) report showed stronger-than-expected business activity, with the index rising to 51.4 in August from 50.4 in July. However, this data failed to provide any significant impulse to the China-proxy AUD.