AUD/USD stays under modest pressure below 0.69 as attention shifts to FOMC

• AUD struggles to recover on expectations of an RBA rate cut.
• US Dollar Index posts modest gains above 98.
• Coming up: FOMC's May meeting minutes.

After closing the previous day below the 0.69 handle on Tuesday, the AUD/USD pair failed to make a meaningful recovery on Wednesday and stays in the negative territory as investors are moving to the sidelines while waiting for the FOMC to release the minutes of its May meeting later today. As of writing, the pair was down 0.1% on a daily basis at 0.6875.

Heightened expectations of the Reserve Bank of Australia going for a rate cut at its June meeting following Governor Lowe's dovish remarks earlier this week put the AUD under heavy selling pressure. Additionally, the lack of fresh developments surrounding the U.S.-China trade conflict makes it difficult for antipodeans to find demand, keeping the bearish pressure on the pair intact.

Earlier today, Treasury Secretary Mnuchin said that he had no plans to travel to Beijing for trade negotiations while adding that President Trump and his counterpart Xi could have a meeting by the end of June.

Meanwhile, the lack of significant macroeconomic data releases today is forcing the US Dollar Index to remain stuck in the upper half of its recent trading range near the 98 mark. 

Previewing the FOMC event, “Our US economists noted that subsequent Fedspeak since Powell’s press conference suggest that there is a solid contingent of officials that agree with this cut of the data, though some find persistently below target inflation as troublesome, regardless of the causes. Therefore, it will be interesting to see how the debate plays out, especially in light of concerns around inflation expectations and the Fed’s policy framework review.” Deutsche Bank analysts said.

FOMC Minutes Preview: Major Banks expectations from meeting minutes

In the remainder of the week, there won't be any macroeconomic data releases from Australia.

Key technical levels