AUD/USD posts modest gains above 0.6700 ahead of Australian GDP data

• AUD/USD trades with mild gains around 0.6715 in Wednesday's early Asian session. 
• Australian Services PMI rose to 52.5 in August vs. 52.2 prior, better than estimated. 
• Traders raised their bets on a more aggressive rate cut after the weaker US Manufacturing PMI data. 

The AUD/USD pair gains traction near 0.6715 during the early Asian session on Wednesday. The upbeat Australian August Purchasing Managers Index (PMI) provides some support to the Australian Dollar (AUD). However, traders will take more cues from Australia's Gross Domestic Product (GDP) for the second quarter, which is due Wednesday.

Data released by the Judo Bank and S&P Global on Wednesday showed that the country's Services PMI came in stronger than expected, rising to 52.5 in August from 52.2 in July. Meanwhile, the Composite PMI improved to 51.7 in August, better than the estimation and the previous reading of 51.4.

Investors will closely watch the Australian GDP growth number, which is expected to grow 0.3% QoQ in the second quarter (Q2) of the year and 1% in the twelve months to June. The stronger-than-estimated GDP could boost the Aussie, while the weaker reading could trigger speculation the Reserve Bank of Australia (RBA) to cut interest rates and might weigh on the AUD.

The US ISM Manufacturing PMI registered the lowest reading since November. The figure rose to 47.2 in August from 46.8 in July, but below the market consensus of 47.5. The weaker reading raised the probability the Federal Reserve (Fed) will cut the interest rate by at least a quarter percentage point later this month. 

Traders raised the chance of a more aggressive half-point reduction to 39%, up from 31% before the US ISM Manufacturing PMI report, according to the CME Group's FedWatch measure. The US ISM Services PMI will be released on Thursday, which is projected to ease to 51.4 in August from 51.1 in July. On Friday, the attention will shift to the US Nonfarm Payrolls (NFP) report for August.