AUD/USD maintains its offered tone below 0.6500, looks to FOMC minutes for fresh impetus

AUD/USD dropped to a fresh multi-month trough after Trump’s tariff threats on Tuesday.

Bets for slower Fed rate cuts lift the US bond yields and the USD and also exert pressure. 

Bears take a brief pause for a breather and look to FOMC minutes before placing fresh bets.

The AUD/USD pair struggles to capitalize on its intraday bounce from the 0.6435-0.6430 area, or its lowest level since August 5 touched earlier this Tuesday and keeps the red through the first half of the European session. Spot prices currently trade around the 0.6480 region, down for the second straight day, and seem vulnerable amid renewed US-China trade war fears.

US President-elect Donald Trump threatened to impose a 25% tariff on all products coming into the US from Mexico and Canada and an additional 10% tariff on all Chinese imports. This, in turn, tempers investors' appetite for riskier assets and turns out to be a key factor undermining the China-proxy Australian Dollar (AUD), which, so far, has failed to benefit from the Reserve Bank of Australia's (RBA) hawkish stance. Apart from this, the emergence of some US Dollar (USD) buying adds credence to the near-term negative outlook for the AUD/USD pair.