AUD Surges as Softer US Data Weighs on USD

The US Dollar weakened on Wednesday due to softer-than-expected US economic data and easing tensions between Washington and Tehran. This led to broad-based USD weakness, with the AUD/USD pair advancing 0.20% to trade around 0.7060. The US Dollar Index (DXY) was down 0.16% at 99.70.

Market participants reacted negatively to weaker-than-expected labor market data from the ADP Employment Change report, which showed a 44K increase in private-sector employment in July, below the forecast of 70K. The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) also came in at 54.1, slightly below expectations.

Additionally, reports that the US has lifted selected Iran-related sanctions weighed on the Greenback. This move is seen as a potential de-escalatory step as negotiations involving the US, Oman, and Iran continue to advance.