Later today, the US private sector PMI data will influence US-Aussie interest rate differentials and AUD/USD outlook.
A sharp deterioration in US services sector activity and softer prices may raise bets on a Q3 Fed rate cut, narrowing the rate differential favoring the Aussie dollar. A narrower rate differential may drive AUD/USD toward $0.65 and the June 16 high of $0.65517.
Conversely, a higher Services PMI reading with an uptrend in prices may reduce Q3 2025 Fed rate cut expectations. A less dovish Fed rate path could widen the rate differential, bringing sub-$0.64 levels into play.
