AUD/USD Advances above 0.6520 During a Subdued Session
The AUD/USD maintains its rally near 0.6525, gaining 0.16 percent on the day. In February, the US PCE increased 2.5% year-over-year, coinciding with market expectations. In March, the Chinese NBS Manufacturing PMI rose to 50.8 from 49.1 the previous month.

At 0.6525, the AUD/USD begins the new week on a positive note. Easter Monday is a national holiday in Australia, so the market is probably quiet. For renewed motivation, investors will closely monitor the US ISM Manufacturing Purchasing Managers Index (PMI), which is anticipated to rise from 47.8 in February to 48.4 in March.
The Personal Consumption Expenditures Price Index (PCE) for inflation in the United States increased 2.5% year-over-year in February, which was consistent with expectations. The month-over-month increase of 0.4% was marginally below the market consensus for the same month. In addition, in accordance with expectations, the Core PCE, which excludes volatile food and energy costs, increased by 2.8% annually and 0.3% monthly. The data indicated a sustained trajectory of inflation, which might impede the Federal Reserve's (Fed) ability to initiate interest rate reductions this year. In the near future, the US Dollar (USD) is likely to receive some support from the higher-for-longer US interest rate narrative.
On Friday, Federal Reserve Chairman Jerome Powell stated that the latest US inflation data was "concerned with our expectations" and thus maintained the organization's benchmark for interest rate reductions in the current year. Three rate reduction remained in the plans of Fed officials for this year. Investors anticipate that the initial rate decreases will occur during the June meeting.
Regarding the Australian dollar, positive Chinese PMI data could potentially halt the depreciation of the AUD, which serves as a proxy for China. On Sunday, the National Bureau of Statistics (NBS) of China announced that the monthly NBS Manufacturing PMI for March rose from 49.1 to 50.8. In the interim, the NBS Non-Manufacturing PMI increased from 51.4 in February to 53.0 in March.
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