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.

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.