AUD/USD Pair Slips to Session Lows Amid Hawkish Fed Expectations

The Australian dollar extended its decline against the US dollar on Tuesday due to the broad-based strength of the greenback and cautious market positioning ahead of the Federal Reserve's upcoming monetary policy decision.

The AUD/USD pair slipped to session lows as traders weighed the implications of a potentially hawkish Fed stance on the currency pair, which could further support the US dollar and put additional downward pressure on the Australian dollar.

The primary driver of the Australian dollar's weakness is the narrowing interest rate differential between the two countries, with the Reserve Bank of Australia (RBA) maintaining a relatively dovish stance compared to the Fed.