Crypto & Forex August 20, 2026 0 Comments

Is the Australian Dollar’s Slump Signaling a Hidden Opportunity Amid Rising US Yields and Disappointing PMIs?

Ever wonder why the Australian Dollar seems to have its own mood swings against the Greenback? Well, Thursday’s market drama had the AUD/USD take a step back, even as the US Treasury tried hard to play firefighter with their new long-end bond buyback plan. US bond yields popped right back up, shrugging off those efforts, nudging the Aussie down to 0.7114 — a subtle but telling retreat. It’s like watching a tug-of-war where the US yields are pulling away with a bit more muscle, despite some solid resilience showing in Australia’s manufacturing and services sectors. The market’s got that jittery vibe again, with the US 30-year yield bouncing back from earlier lows, and the Greenback flexing its muscles against other majors. The question is, will the Aussie find its footing, or are there more twists ahead as global tensions and economic numbers keep stirring the pot? Buckle up—this currency rollercoaster isn’t slowing down anytime soon. LEARN MORE

The Australian Dollar retreated against the Greenback on Thursday as US bond yields resumed their advance, despite the US Treasury’s efforts to cap elevated yields following its announcement of a long-end bond buyback program. The AUD/USD trades at 0.7114, down 0.14%.

AUD/USD retreats as Treasury yields recover, offsetting support from resilient Australian PMIs

When the US Treasury’s program was announced, the US 30-year yield fell, and it is now back at 5.25%, after reaching a low of 5.178% earlier in the day. The US Dollar Index (DXY), which tracks the Greenback’s value against six peers, is up 0.07% at 99.83.

Consequently, the AUD/USD soared sharply to a weekly high of 0.7132, before retreating.

Thursday’s economic docket in the US featured Initial Jobless Claims for the week ending August 15, and came at 206K, below forecasts and the previous print reading.

Recently, the US Treasury Secretary Scott Bessent said, “We are announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation.” He said the U-turn in US yields is “noise” and that buyback operations “could be more than the $4 billion.”

Regarding the US – Iran conflict, US President Donald Trump said that the US is essentially and soon controlling the Strait of Hormuz, noting that Iran has some missiles and drones, but a low capacity to build.

In Australia, the S&P Global Manufacturing PMI was 52 in August, unchanged from July’s data. At the same time, the S&P Global Services PMI for the same period decelerated from 53.6 to 52.9.

Eleanor Dennison, Economist at S&P Global Market Intelligence, said: “Positively, manufacturing enjoyed its strongest injection of new work since the start of the year, although disruption to supply chains and challenges on the cost front led to a slight drop in output. Services, meanwhile, maintained its growth path, but with rates of expansion in both activity and new business softening slightly compared to July.”

Ahead, the US economic docket will feature Flash PMIs, which are expected to slow, with the Manufacturing PMI projected at 53.8, down from 53.9, and the Services PMI forecast at 54.0, down from 54.6.

AUD/USD Price Forecast: Technical outlook

Chart Analysis AUD/USD — AUD/USD daily chart

In the daily chart, AUD/USD trades at 0.7116. The pair holds above the latest simple moving average triple at 0.6997 and the short-term upward trend line breakpoint near 0.6975, keeping the near-term tone constructive. Price is advancing within a broader rising structure, although several upward trend line break levels between 0.7300 and 0.7311 sit overhead as the next barriers. The Relative Strength Index (14) around 64 leans bullish but not yet overbought, suggesting room for further gains while the spot remains supported above its underlying averages.

On the downside, immediate support is located at the current price area around 0.7116, followed by the clustered technical floor coming from the simple moving average triple at roughly 0.6997 and the shorter-term trend line break at 0.6975. A deeper slide would expose the former downward resistance trend line breakpoint near 0.6398 as a more distant structural base. On the topside, initial resistance is seen at the upward trend line break around 0.7300, with a slightly higher confluence zone near 0.7311; a sustained move above these levels would open the way toward the next trend-line-derived objectives around 0.8440 and 0.9162.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator

S&P Global Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in Australia’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for AUD.