AUD/USD holds above the 0.6420 mark, investors await Australian, US PMI data

• AUD/USD holds positive ground around 0.6420 amid the weakening US Dollar.
• Market players are increasing their bets on additional rate rises by Federal Reserve (Fed).
• The People’s Bank of China (PBoC) slashed its Loan Prime Rate (LPR) for one year by a smaller margin than anticipated.
• Investors await S&P Global PMI from Australia, the US.

The AUD/USD pair gains momentum for the second consecutive day. The pair edges higher to the 0.6420 mark in the Asian session on Tuesday. The Greenback faces some follow-through selling after S&P Global downgraded and revised its outlook for multiple US banks on Monday, following a similar action by Moody’s.

The weakening of the US Dollar has boosted AUD/USD. On Monday, S&P Global downgraded multiple US banks, indicating a rapid increase in interest rates is putting a strain on the financing and liquidity of many US institutions. However, market participants are increasing their bets on additional rate rises by the Federal Reserve (Fed), which drive US 10-year Treasury bond yields to 4.366%, the highest level of 2007.

On the other hand, the People’s Bank of China (PBoC) slashed its Loan Prime Rate (LPR) for one year by a smaller margin than anticipated. Chinese central bank decided to cut the one-year Loan Prime Rate (LPR) by 10 basis points (bps) to 3.45% from 3.55% and maintained the five-year LPR unchanged at 4.2%. Investors will keep an eye on the headline surrounding China’s economic woes as it might impact the Aussie, a proxy for China's economic prospects.

Looking ahead, market players await S&P Global PMI from both Australia and the US due on Wednesday. Later in the week, the US Existing Home Sales, Initial Jobless Claims, and Durable Good Orders will be released. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be in the spotlight this week. Traders will take cues from the data and find opportunities around the AUD/USD pair.