AUD/USD struggles to surpass 0.6670 as investors turn anxious ahead of Fed policy

• AUD/USD is struggling in extending its recovery above 0.6670 ahead of Fed policy.
• RBA policymakers still believe that Australian inflation could show volatility in the inflation monthly figures.
• A two-day winning spell in S&P500 is conveying confidence among investors despite fears of potential banking shakedown.

The AUD/USD pair is facing barricades in extending its recovery move above the immediate resistance of 0.6670 in the early Asian session. The Aussie asset is expected to remain volatile ahead as investors are awaiting the Federal Reserve (Fed) monetary policy for fresh impetus. The Australian Dollar remained in action on Tuesday after the release of the Reserve Bank of Australia (RBA) monetary policy minutes.

According to the RBA minutes, policymakers were considering a pause in the tightening process just after a two-month fall in the monthly Consumer Price Index (CPI) numbers. However, RBA policymakers still believe that Australian inflation could show volatility in the inflation figures on a month-on-month basis. Also, the surety lacks that inflation has peaked now.

Meanwhile, S&P500 continued its recovery move firmly on Tuesday, portraying a steep rise in the risk appetite of the market participants. A two-day winning spell is conveying confidence among investors despite fears of potential banking shakedown after the collapse of three mid-size United States banks in a span of one week.

The US Dollar Index (DXY) has shown a recovery move from the cushion of 103.00 and sheer volatility is expected as investors are likely to react to changing odds for the interest rate decision by the Fed. Odds for an unchanged policy are solid as the street anticipates that further rate hikes by the fed would be unable to restore the confidence of investors after banking sector fiasco. Also, investors are worried that a liquidity influx of $30 billion into First Republic Bank is unable to get the institution out of trouble.