AUD Edges Higher Amid Mixed US PMIs Ahead of Fed Meeting

The Australian Dollar has edged higher near 0.6990 after mixed US PMIs.

The preliminary S&P Global Manufacturing Purchasing Managers Index (PMI) eased to 53.8 in July from 53.9, missing the market forecast of 54.5. In contrast, the Services PMI climbed sharply to 53.6 from 51.2, significantly exceeding expectations of 51.0.

This mixed reading has allowed AUD/USD to regain some ground, with the 4-hour chart showing a modest rebound from recent lows. However, the strong services reading may keep US Treasury yields supported and limit the Australian Dollar's recovery.

Investors will now turn their attention to next week's Federal Reserve (Fed) meeting on July 28-29. The Fed is widely expected to leave interest rates unchanged at 3.50%, 3.75%. As this meeting will not include a Summary of Economic Projections, the main focus will be on the policy statement and Fed Chair Kevin Warsh's press conference.

Warsh's language on elevated inflation, resilient economic activity, and the impact of higher energy prices will be crucial. A hawkish message suggesting that further interest rate increases remain possible could strengthen the Greenback and pressure AUD/USD.