AUD/USD sees a downside below 0.6730 despite Fed’s less-hawkish policy expectations

• AUD/USD is expected to display sheer weakness after shifting its auction profile below 0.6730.
• China’s easing quarantine rules for inbound travelers have failed to keep the risk on impulse solid.
• The Australian Dollar has failed to regain strength despite a revision in China’s GDP to 8.4% from 8.1% estimated earlier.

The AUD/USD pair is hovering around Tuesday’s low near 0.6730 in the early Asian session. The US Dollar Index (DXY) has managed to hold the 104.00 area despite rising expectations of a less-hawkish monetary policy by the Federal Reserve (Fed). The Aussie asset is at a make-or-break level and therefore is expected to remain on tenterhooks.

Meanwhile, the risk impulse has been turned sour again after S&P500 failed to capitalize on Friday’s revival move on Tuesday. Easing quarantine rules by China failed to keep the risk appetite theme firm in the global market. The 10-year US Treasury yields have escalated to near 3.85%.

The Australian Dollar has failed to regain strength despite easing Covid curbs by the Chinese administration. The Chinese government is trying to get on the path of progress with sheer enthusiasm. The nation has scrapped the quarantine rule for inbound travelers despite a solid spike in Covid cases. Apart from the easing Covid restrictions, positive revision of China’s Gross Domestic Product (GDP) failed to provide support to the antipodean.

In a statement released on Tuesday, China’s National Bureau of Statistics (NBS) said that they have revised the country’s estimate of 2021 GDP growth to 8.4% from 8.1% previously.

On the United States front, a swift fall in United States Durable Goods Orders and consumption expenditure by households is likely to impact the USD Index ahead. Economists at ING are of the view that the recession will accelerate inflation's slide and allow the Fed to respond with rate cuts before 2023 is out.