AUD/USD advances to near 0.6550 as US Dollar declines ahead of US job data

• AUD/USD jumps to near 0.6560 as Fed dovish expectations have weighed on the US Dollar.
• Fed officials have started arguing in favor of monetary policy expansion amid growing labor market concerns.
• Australia's Caixin Manufacturing PMI data came in higher at 50.5.

The AUD/USD pair gains sharply to near 0.6560 during the European trading session Monday. The Aussie pair advances as the US Dollar (USD) underperforms its peers on expectations that the Federal Reserve (Fed) will cut interest rates in the monetary policy meeting this month.

During the press time, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, slides to near 97.55, the lowest level seen in a month.

Growing United States (US) labor market concerns in the wake of tariffs imposed by President Donald Trump has increased traders' confidence that the Fed will cut borrowing rates this month.

Also, a slew of Federal Open Market Committee (FOMC) members, including Jerome Powell, has also turned dovish in the monetary policy outlook, citing concerns over job demand.

For fresh cues on the current status of the US labor market, investors will focus on a number of employment-related data this week, such as JOLTS Job Openings for July, and ADP Employment Change and Nonfarm Payrolls (NFP) data for August.

Meanwhile, the Australian Dollar (AUD) trades higher as Caixin Manufacturing Purchasing Managers' Index (PMI) has returned to expansion in August, released earlier in the data. The PMI data came in at 50.5, higher than expectations and the prior reading of 49.5. A figure below the 50.0 threshold is considered as contraction in the business activity.