AUD/USD rises to near 0.6480 as accelerating Fed dovish bets weigh on US Dollar

• AUD/USD gains to near 0.6480 as rising Fed dovish bets have pushed the US Dollar on the back foot.
• The US NFP report for July has shown signs of weak labor demand.
• Investors await the US Services PMI data for July.

The AUD/USD pair moves higher to near 0.6480 during the European trading session on Monday. The Aussie pair gains as demand for risk-perceived assets has increased, following an increase in market expectations that the Federal Reserve (Fed) could resume its monetary expansion cycle in the September meeting.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates in the September meeting has increased to 80.8% from 41.2% seen on Thursday, a day before the release of the Nonfarm Payrolls (NFP) data for July.

Traders raised Fed dovish bets significantly as the US NFP report signaled a slowdown in the labor demand. The report showed an addition of 73K fresh workers, sharply lower than estimates of 110K. Also, employment figures for June were revised significantly lower to 14K from 147K. The Unemployment Rate rose to 4.2%, as expected, from the prior release of 4.1%.

Accelerating Fed dovish bets have weighed heavily on the US Dollar. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, ticks up to near 98.90. However, the Index fell over 1.4% in a single trading day on Friday from its here-month high of 100.25.

Meanwhile, investors await the US revised S&P Global and ISM Services PMI data for July, which is scheduled to be released on Tuesday.

In Australia, markets are closed on account of a Bank Holiday.