• AUD/USD edges lower to 0.6900 as the US Dollar gains firm footing.
• The US Dollar bounces back as traders brace for a slew of US data.
• Fed Powell pushed back large rate cut expectations for November.

The AUD/USD pair exhibits a subdued performance near the crucial support of 0.6900 in Tuesday’s European session. The Aussie asset faces slight selling pressure as the US Dollar (USD) bounces back strongly after the Federal Reserve (Fed) Chair Jerome Powell pushed back market speculation for another interest rate cut of 50 basis points (bps) in November.

The CME FedWatch tool shows that the probability of the Fed reducing interest rates by 50 basis points (bps) to 4.25%-4.50% in November has eased to 39% from 58% a week ago.

S&P 500 futures have posted some losses in the European session, portraying a cautious market mood. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises sharply to near 101.00. However, 10-year US Treasury yields tumble to near 3.75%.

Fed Powell commented on Monday at the National Association for Business Economics conference that policymakers don’t feel for cutting interest rates quickly. In the latest Fed dot plot, officials forecasted the Federal Fund Rate heading to 4.4% by the year-end, indicating that there will be two quarter-to-a-percentage rate cuts in each of the two meetings remaining this year.

On the economic front, investors will focus on the United States (US) JOLTS Job Openings data for August and the ISM Manufacturing PMI for September, which will be published at 14:00 GMT.