AUD/USD gathers strength above 0.6500 as Fed rate cut bets remain intact

• AUD/USD strengthens to near 0.6510 in Monday's early Asian session. 
• Flash UoM Consumer Sentiment missed the consensus in August; Retail Sales came in line with the consensus. 
• Softer China's Retail Sales and Industrial Production might cap the upside for the China-proxy Aussie. 

The AUD/USD pair gains ground around 0.6510 during the early Asian session on Monday. The US Dollar (USD) remains weak against the Australian Dollar (AUD) as US economic data keep the case for a September Federal Reserve (Fed) interest rate cut intact. Investors will keep an eye on the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) data, which is due later on Thursday. 

US Consumer Sentiment lost momentum in early August, declining to 58.6 in August from 61.7 in July, according to preliminary data from the University of Michigan (UoM). This figure came in worse than the expectation of 62.0 and signaled a poor backdrop in public confidence, which exerted some selling pressure on the Greenback. 

Meanwhile, the US Retail Sales increased by 0.5% on a monthly basis in July, compared to a rise of 0.9% seen in June, the US Census Bureau reported on Friday. This reading came in line with the market consensus. Money markets are now pricing in nearly a 93% odds of a 25 basis points (bps) Fed rate cut in September, according to the CME FedWatch tool.

On the other hand, softer Chinese economic reports released on Friday might drag the China-proxy Aussie lower. The National Bureau of Statistics (NBS) showed on Friday that China's Retail Sales increased 3.7% YoY in July, compared to 4.6% expected and 4.8% in June. 

Meanwhile, Industrial Production rose 5.7% YoY in July versus 6.8% prior. This figure came in worse than the estimation of 2.7%. It's worth noting that China is a major trading partner of Australia and weak Chinese data tends to have a negative impact on the AUD value.