AUD/USD falls slightly as US Dollar trades steadily ahead of US Services PMI

• AUD/USD ticks lower as the US Dollar gains ground, while its outlook remains uncertain.
• The Fed will likely cut interest rates in the September meeting.
• Investors await the US Services PMI data for July.

The AUD/USD pair edges lower to near 0.6450 during the European trading session on Tuesday. The Aussie pair ticks down as the US Dollar (USD) gains ground, following the soft United States (US) Nonfarm Payrolls (NFP)-driven sell-off.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades 0.25% higher around 99.00. On Friday, the DXY plunged more than 1.4% after the NFP report showed signs of weak labor demand.

Cooling labor market conditions have prompted traders to raise bets favoring interest rate cuts by the Federal Reserve (Fed) in the September meeting.

According to the CME FedWatch tool, the probability of the Fed to cut interest rates in the September meeting has increased to 92.2% from 41.2% seen on Thursday, a day before the release of the Nonfarm Payroll (NFP) data for July.

In Tuesday's session, investors will focus on the US revised S&P Global and ISM Services PMI data for July. Economists expect the ISM Services PMI, which gauges activities in the services sector, that accounts for the two-third of the economy, to come in at 51.5, higher than 50.8 in June.

Meanwhile, the Australian Dollar (AUD) is expected to remain under pressure as the Reserve Bank of Australia (RBA) is almost certain to cut interest rates in the monetary policy meeting this month. Traders are increasingly confident about an interest rate reduction this month as price pressures have cooled down.