• AUD/USD struggles to gain strength despite the US Dollar corrects after the release of the US annual PPI report for August.
• Investors see the Fed reducing interest rates by 25 bps next week.
• Growing worries over Australian economic prospects have prompted the need of RBA rate cuts.

The AUD/USD pair strives for strong buying interest to extend its upside to near 0.6700 in Thursday’s North American session. The Aussie asset struggles to gain strength despite the release of the softer than expected United States (US) annual Producer Price Index (PPI) data for August.

The PPI report showed that the annual headline PPI grew at a slower pace of 1.7% from the estimates of 1.8% and from 2.1% in July, downwardly revised from 2.2%. In the same period, the core producer inflation – which excludes volatile food and energy prices – rose steadily by 2.4%, slower than expectations of 2.5%. A slower pace in the price increase of goods and services at factory gates suggest a sluggish consumer spending trend, which generally prompts Federal Reserve (Fed) interest rate cut bets.

However, the monthly headline and core PPI rose at a faster-than-expected pace of 0.2% and 0.3%, respectively. Soft US annual PPI data has weighed on the US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 101.60.