AUD Selloff Continues as Rising Yields Offset Chinese PMI

The Australian Dollar struggled to maintain its momentum on Tuesday as the US Dollar rallied due to rising US Treasury yields. The AUD/USD pair declined by 0.29% and was trading around 0.7145 at the time of writing.

Chinese economic data, which is closely tied to Australia's economy, showed signs of improvement with China's RatingDog Manufacturing Purchasing Managers Index (PMI) rising to 51.5 in August from 50.9 in July. This was above market expectations and indicates an expansion in activity.

However, the US Dollar found renewed support as US Treasury yields rose amid higher Oil prices and renewed geopolitical tensions in the Middle East. The benchmark 10-year US Treasury yield reached 4.78%, approaching its recent high of 4.81%.