AUD Holds Ground Despite Weak Chinese PMIs
The Australian Dollar held its ground despite weak Chinese PMIs, which weighed on demand for the AUD. The pair traded near 0.7020 after retreating from fresh multi-week highs around 0.7045. China's official Manufacturing and Non-Manufacturing PMIs missed expectations, with the former falling to 49.2 in July from 50.3 previously.
Meanwhile, Dallas Fed President Logan reiterated that inflation remains above target, adding support for the US Dollar. The Greenback also found support after Logan struck a notably hawkish tone, warning that inflation is not on track to return to the Fed's 2% target and arguing that risks to inflation remain skewed to the upside.
The Australian Producer Price Index (PPI) accelerated to 3.6% YoY in the second quarter from 3.0% previously, suggesting pipeline inflation pressure remains elevated. However, this stronger inflation reading was insufficient to offset the negative impact from China and the stronger US Dollar.