AUD/USD hits fresh yearly lows near 0.6300 with all eyes on teh Fed

• The Aussie approaches 0.6300 weighed by risk aversion ahead of the Fed and China woes.
• The Dollar remains strong supported by investors' fears of a "hawkish cut" by the Fed.
• Grim data from China and fears of higher tariffs in the US are acting as a headwind for the Aussie.
   

The Australian Dollar is trading at fresh one-year lows near 0.6300, drawing closer to last year’s low at 0.6270 in a risk-averse market with traders cautious ahead of the Fed’s decision.

Investors are nearly fully pricing a 25 bps cut by the Fed later today, although the strong US data seen recently and the rising inflationary pressures are likely to force the bank to adopt a more cautious approach to rate cuts next year.

On the macroeconomic front, data released on Tuesday revealed that US Retail Sales beat expectations in November. These figures come after the upbeat business activity figures seen on Monday confirming that the US economy is growing at a solid pace in the last quarter of the year.

On the other hand, the Aussie Dollar is bleeding amid rising concerns about the sluggish recovery in China, a key partner.  Recent data from the Asian country showed that consumption remains depressed with housing prices declining further.

The outlook for next year is far from cheerful, as prospects of higher tariffs on Chinese products by the next US administration will likely weigh on growth and hurt the Australian economy. This is keeping Ausie’s upside attempts limited.