The Australian dollar strengthened to around $0.653 on Wednesday, snapping a three-day losing streak, as investors turned their attention to Thursday's labor market data, which could provide fresh insight into the near-term policy outlook.

The Reserve Bank of Australia has recently adopted a cautious, data-driven stance, citing a more balanced inflation outlook and ongoing labor market resilience.

And a robust jobs report could cast doubt on the 80% market-implied probability of a rate cut at next month's meeting. Markets are currently expecting a gain of 20,000 jobs in June and an unchanged unemployment rate of 4.1%.

Meanwhile, hotter-than-expected US inflation data for June dimmed hopes for a Fed rate cut in September and revived concerns over higher import levies, limiting gains for the risk sensitive Aussie. On the trade front, President Trump cuts tariffs on Indonesian goods to 19% in exchange for major purchase commitments, while warning of over 10% tariffs on smaller nations.

Source: Trading Economics