• AUD/USD struggles to capitalize on modest intraday gains amid reviving USD demand.
• China’s economic woes further contribute to capping gains despite RBA’s hawkish bias.
• Investors look to US Trade Balance data ahead of Chinese trade figures on Wednesday.

The AUD/USD pair attracts fresh sellers following an intraday uptick to the 0.6540 region and drops to the lower end of its daily range during the first half of the European session on Tuesday. Spot prices currently trade around the 0.6500 psychological mark and for now, seem to have stalled the goodish recovery move from the YTD low touched on Monday.

The Australian Dollar (AUD) got a minor lift earlier this Tuesday after the Reserve Bank of Australia (RBA) kept interest rates unchanged and indicated that it will keep policy restrictive in the wake of still sticky inflation. The outlook was reaffirmed by RBA Governor Michele Bullock, saying that inflation might take too long to return to target and that interest rates might need to remain higher for an extended period. This, along with a positive turnaround across the global equity markets, offered some support to the AUD/USD pair.

That said, concerns about an economic downturn keep a lid on any further appreciating move for the China-proxy Aussie. Apart from this, a goodish pickup in the US Dollar (USD) demand, bolstered by a solid bounce in the US Treasury bond yields, further contributes to capping the upside for the AUD/USD pair. This, along with the risk of a further escalation of geopolitical tensions in the Middle East, makes it prudent to wait for strong follow-through buying before confirming that spot prices have formed a near-term bottom.