The AUD/USD pair weakened for the third consecutive trading day on Wednesday (August 20th). The Australian currency pair slumped near 0.6425 as antipodean currencies underperformed their peers.

The Australian dollar faced sharp selling pressure as financial market participants expected the Reserve Bank of Australia (RBA) to cut interest rates again for the remainder of the year. Dovish bets from the RBA intensified as inflation in Australia has approached the central bank's desired range of 2%-3%.

Earlier, the People's Bank of China (PBOC) maintained its benchmark interest rate. China's monetary policy significantly impacts the Australian dollar, given its economy's heavy reliance on exports to Beijing.

Meanwhile, investors awaited the preliminary Australia-United States (US) private sector Purchasing Managers' Index (PMI) data for August, scheduled for release on Thursday.

On Wednesday, investors will focus on the minutes of the Federal Open Market Committee's (FOMC) July policy meeting, which will be released at 18:00 GMT. At the meeting, the Fed maintained interest rates in the 4.25%-4.50% range and stated that a "wait-and-see" approach was optimal amid a lack of clarity regarding the potential consequences of tariffs on inflation and the economy.

Ahead of the FOMC minutes, the US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, was trading near a weekly high around 98.00. (alg)

Source: FXstreet