AUD/USD approaches 0.6500 with the US Dollar on the defensive

• The Dollar bleeds on tariff uncertainty and US debt concerns.
• Strong Australian manufacturing data has provided support to the Aussie.
• The focus today is on the US Manufacturing PMI and Fed Powell's speech.

The Australian Dollar is one of the stronger performers on Monday. The sour risk sentiment is not weighing the Aussie today, which is drawing support from a weak US Dollar to reach levels right below 0.6500.

The Greenback has opened the week on the back foot, hit by a mix of events. Trump's vow to hike Steel and Aluminium imports to 50% threatens to further constrain economic growth and stoke inflation, which has revived investors' fears of stagflation.

Beyond that, the US president has opened a new front in an already frail trade relationship with China, while market concerns about the impact of a tax-slashing bill on the country's fiscal health remain looming. All, this is giving a fresh boost to the "sell America" trade.

Australian manufacturing activity keeps growing

In Australia, the S&P Global manufacturing PMI revealed that the sector's activity continued growing in May, albeit at a slower-than-expected pace. These figures support the hawkishly tilted message by the RBA last week and provide some support to the AUD.

In the US, the focus today is on the ISM Manufacturing PMI, which is expected to have continued improving in May, although still at levels reflecting contraction. The US Dollar needs a positive surprise here to ease bearish pressure.

Apart from that, Fed's Logan and Goldsbee will meet the press ahead of Chairman Powell. Their comments about economic growth, employment, and inflation will be analysed with attention for clues about the bank's plans for June and July meetings.