• AUD/USD bounces back as the US Dollar falls after a short-lived pullback post US weekly jobless claims data.
• The upside in the US Dollar remains capped by optimism over Fed interest rate cuts in September.
• Australian Composite PMI returns to expansion in August.

The AUD/USD pair discovers buying interest from the intraday low of 0.6725 in Thursday’s New York session. The Aussie asset is expected to resume its upside journey as the US Dollar (USD) retreats after the release of the United States (US) Initial Jobless Claims report for the week ending August 16.

The report showed that the number of individuals claiming jobless benefits for the first time came in higher at 232K from the estimates of 230K and the prior release of 228K, upwardly revised from 227K, accelerating worries of deteriorating labor market conditions. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls after a short-lived pullback move to near 101.40.

The near-term appeal of the US Dollar is already vulnerable as the Federal Reserve (Fed) seems to be on track to start reducing interest rates in September. The latest Federal Open Market Committee (FOMC) minutes showed that the ‘vast majority’ of officials see interest rate cuts appropriate in September, given that price pressures continue to ease as expected.