• AUD/USD attracts some intraday sellers on reports that China will cut mortgage rates this month.
• Diminishing odds for a larger Fed rate cut underpins the USD and further contributes to the slide.
• Bets for the start of the Fed’s policy-easing cycle, the upbeat mood caps the buck and lends support.

The AUD/USD pair retreats around 40 pips from the vicinity of the 0.6700 mark, or a fresh weekly high set earlier this Thursday and drops to a daily low during the first half of the European session. Spot prices, for now, seem to have stalled the recovery from a four-week trough touched on Wednesday and currently trade around the 0.6670-0.6665 region, nearly unchanged for the day. 

Reports that China will cut interest rates on $5 trillion mortgages as soon as this month to try and bolster consumption activity revive concerns about a slowdown in the world's second-largest economy. This, in turn, weighs on antipodean currencies, including the Australian Dollar (AUD), which, along with a modest US Dollar (USD) strength, turn out to be key factors behind the sharp intraday downfall.

The crucial US Consumer Price Index (CPI) report released on Wednesday indicated that consumer prices in the US are easing overall. That said, the core CPI suggests that the underlying inflation remains sticky and dashed hopes for a larger rate cut by the Federal Reserve (Fed) next week. This leads to an uptick in the US Treasury bond yields and lifts the Greenback back closer to the monthly peak.