AUD/USD consolidates near three-week low as focus turns to Australia PMI preliminary release

• AUD/USD consolidates near 0.6430 after hitting a three-week low.
• The US Dollar eases as US President Donald Trump calls for Fed Governor Lisa Cook's resignation, sparking political uncertainty.
• Traders eye Thursday's S&P Global Flash Australia PMI preliminary release for fresh signals on business activity, with a soft reading likely to weigh further on the Aussie.

The Australian Dollar (AUD) extends its decline for the third consecutive day against the US Dollar (USD) on Wednesday, touching a three-week low before steadying. At the time of writing, AUD/USD is consolidating losses around 0.6432, down over 0.30% on the day, as the Aussie remains under pressure despite a softer Greenback.

The US Dollar is easing back from a one-week high, weighed down by renewed political tension in Washington after President Donald Trump publicly called for the resignation of Federal Reserve Governor Lisa Cook. The move has injected fresh uncertainty into the central bank's policy outlook, prompting a retreat in the Dollar Index (DXY) and trimming some of the Greenback's recent gains.

Adding to the pressure, the Federal Reserve's (Fed) July meeting minutes showed that a majority of policymakers continued to view inflation risks as outweighing employment risks. Several participants noted that it would not be feasible to wait for complete clarity on the impact of tariffs before adjusting monetary policy, while others highlighted that the current federal funds rate may not be far above its neutral level.

Even so, the Australian Dollar has struggled to capitalize on the softer US Dollar backdrop. The currency remains vulnerable as investors assess the Reserve Bank of Australia's (RBA) dovish tilt following this month's rate cut to 3.60%, while sentiment toward China -- the country's biggest export market -- was dented further after the People's Bank of China opted to keep its benchmark lending rates unchanged earlier today.

The combination of domestic monetary easing, muted Chinese stimulus, and cautious global risk sentiment has kept the AUD under pressure. Focus now shifts to the preliminary release of the S&P Global Australia PMI on Thursday, which will provide an early snapshot of economic activity in August. A softer print could reinforce downside risks for the Aussie, while a stronger-than-expected outcome may offer some relief and help the currency stabilize after its recent decline.