• AUD/USD rose to six-week highs around 0.6598, with traders eyeing a break above the 0.6600 psychological barrier.
• Focus turns to Tuesday’s US NFP benchmark revision, followed by PPI on Wednesday and CPI on Thursday.
• In Australia, upcoming Westpac Consumer Confidence and NAB surveys will guide sentiment after stronger Q2 GDP led traders to scale back RBA easing bets.

The Australian Dollar (AUD) trades higher against the US Dollar (USD) on Monday, extending last week’s rally, with AUD/USD climbing to its strongest level in six weeks, last seen in late July. The pair is buoyed by a broadly weaker Greenback and softer US Treasury yields in the aftermath of Friday’s downbeat US Nonfarm Payrolls (NFP) report, which cemented expectations of imminent monetary policy easing from the Federal Reserve (Fed).

At the time of writing, AUD/USD is trading near 0.6584, up almost 0.40% on the day. The pair is consolidating gains and could be gearing up for another push higher if buyers manage a decisive break above the 0.6600 psychological barrier. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, remains under pressure near two-month lows, though it is holding steady around the 97.50 level.

The latest batch of US employment figures confirmed that the labor market is losing momentum. Markets had already fully priced in a 25 basis point (bps) cut at the Fed’s September 16-17 monetary policy meeting, but the weaker NFP print has pushed investors to assign around a 10% chance of a larger 50 bps move, up from nearly zero a week ago. According to the CME FedWatch Tool, the odds of a quarter-point cut remain near 90%, with futures also pointing to expectations for as many as three rate cuts by year-end.

Attention now turns to the annual Nonfarm Payrolls (NFP) benchmark revision, due on Tuesday. The release will recalibrate payroll levels as of March and could significantly alter perceptions of labor market strength over the past year. Economists note that large downward revisions would reinforce the view that job growth has been overstated, further cementing the case for Fed easing, while an upward adjustment could temper expectations for aggressive rate cuts. Beyond that, inflation figures will take center stage, with Producer Price Index (PPI) data due Wednesday, followed by the more closely watched Consumer Price Index (CPI) on Thursday. Together, these releases will be critical in shaping the Fed’s policy path heading into the September meeting.

In Australia, focus will turn to Tuesday’s releases of Westpac Consumer Confidence for September and the National Australia Bank (NAB) Business Conditions and Confidence surveys for August, which will provide fresh insights into the domestic outlook. Last week’s stronger-than-expected Gross Domestic Product (GDP) figures, showing the fastest annual growth in nearly two years, led markets to trim expectations of further monetary easing by the Reserve Bank of Australia (RBA). Current pricing now implies around an 80% chance of a 25 basis point cut in November, down from full certainty earlier, while investors broadly expect the central bank to keep policy steady at its upcoming meeting this month.