AUD/USD tumbles to three-week low as US Dollar rallies on robust economic data

• Australian Dollar slumps to its weakest level since September 5 as US Dollar strength dominates.
• US GDP was revised higher to 3.8% in Q2, while weekly Jobless Claims fell to 218,000.
• Attention turns to Friday's US core PCE inflation for fresh Fed policy signals.

The Australian Dollar (AUD) slumps against the US Dollar (USD) on Thursday, with the AUD/USD pair extending losses for a second consecutive session and falling to its weakest level since September 5.

The slide comes as the Greenback surged across the board after a run of stronger-than-expected US economic data reinforced confidence in the resilience of the world's largest economy and dampened risk sentiment.

At the time of writing, AUD/USD is trading near 0.6536, down 0.70% on the day. Meanwhile, the US Dollar Index (DXY), which measures the Greenback's value against a basket of six major currencies, is hovering around 98.55, marking its strongest level in over three weeks.

The Bureau of Economic Analysis revised second-quarter Gross Domestic Product (GDP) higher to an annualized 3.8% from 3.3%, outpacing forecasts. The report also showed the core Personal Consumption Expenditures (PCE) price index rising to 2.6% from 2.5%, underscoring sticky inflation pressures. At the same time, Durable Goods Orders rebounded 2.9% in August, while weekly Initial Jobless Claims fell to 218,000 below expectations of 235,000.

Today's data reinforced the Fed's balancing act between containing inflation and supporting the labor market. While officials have stressed that policy is already "modestly restrictive," the combination of firmer GDP growth and sticky inflation on a quarterly basis suggests there is little urgency to accelerate rate cuts. Instead, attention now turns to Friday's core PCE inflation report.

In Australia, the latest Monthly Consumer Price Index (CPI) for August showed inflation edging up to 3.0% YoY from 2.8% in July. he data arrives ahead of the Reserve Bank of Australia's policy meeting on September 30, where the cash rate is widely expected to be held at 3.60%. Market pricing implies only a slim chance of a move next week, with most economists at the major banks forecasting next rate cut in November.