• AUD/USD falls below 0.6700 as the US Dollar performs strongly.
• The Fed is expected to cut interest rates gradually in the remainder of the year.
• Investors await the Aussie Employment data for September.

The AUD/USD pair extends its downside below the key support of 0.6700 in Wednesday’s European session. The Aussie asset weakens as the market sentiment remains risk-averse on expectations that US former President Donald Trump could win upcoming presidential elections. Trump’s victory could have a negative impact on risk-sensitive currencies as he favors a closed economy culture.

S&P 500 futures exhibit a subdued performance in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises further to near 103.40.

The Greenback posts a fresh two-month high as market participants expect that the Federal Reserve’s (Fed) policy-easing cycle will be gradual in the remainder year. According to the CME FedWatch tool, the Fed will cut interest rates by 50 basis points (bps) to 4.25%-4.50% by the year-end, suggesting that there will be two quarter-to-a-basis rate cuts, which will come in November and December.

Going forward, the next trigger for the US Dollar will be the monthly Retail Sales data for September, which will be published on Thursday. The Retail Sales data, a key measure of consumer spending, rose by 0.3%.