AUD/USD approaches 0.6600 as the US Dollar falls ahead of Fed Powell, Job Openings data

~~The Aussie Dollar reverses previous losses and hits fresh~~ YTD ~~highs near 0.6600.~~
~~Upbeat manufacturing data from China is buoying the Aussie on Tuesday.~~
~~Later today, Fed's Powell, US manufacturing and jobs data are likely to set the US Dollar's direction.~~

Guillermo Alcala FXStreet

The Australian Dollar keeps marching higher against a depressed US Dollar. The pair has reversed earlier losses and is trading higher for the second consecutive day, reaching fresh year-to-date highs at 0.6590.

The US Dollar extends its downtrend on Tuesday, crushed by a mix of US debt fears, hopes of Fed cuts in the second half of the year and the ongoing uncertainty about trade as the July 9 deadline approaches and major trade deals remain elusive.

China's upbeat manufacturing activity is supporting the AUD

Data from China released earlier today revealed that manufacturing activity returned to expansion levels, following a sharper-than-expected improvement in June. These figures have offset the soft NBS PMI reading seen on Monday and provided a fresh boost to the China-proxy AUD.

In the US, Trump’s sweeping tax bill, which is expected to add $3.3 trillion to the US debt pile, is going through a lengthy voting process in the Senate, with investors´ concerns about a debt crisis in the US rising.

This, coupled with increasing bets that the Fed will accelerate its monetary easing cycle in the coming months, and the looming threat of higher tariffs, amid the lack of significant progress on deals with trading partners, id creating a perfect storm for the USD.

Later today, the Fed Chairman, Jerome Powell´s comments at a central bankers’ summit in Sintra, Portugal, might provide further insight on the bank's rate-cutting calendar. Somewhat later, US manufacturing and employment figures will be analysed to confirm Powell’s views.

Economic Indicator

Caixin Manufacturing PMI

The Caixin Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

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