• AUD/USD seesaws between tepid gains/minor losses through the Asian session on Monday.
• A positive risk tone and a slightly better-than-expected Chinese PMI lend support to the pair.
• Bets for more rate hikes by the Fed help revive the USD demand and cap gains for the major.

The AUD/USD pair struggles to capitalize on last week's bounce from sub-0.6600 levels and oscillates in a narrow trading band through the Asian session on Monday. Spot prices currently trade around mid-0.6600s, nearly unchanged for the day, and move little in reaction to the official Chinese PMI print.

The mixed US PCE Price Index released on Friday raised doubt about the possibility of a more aggressive policy tightening by the Federal Reserve (Fed) and boosted investors' sentiment, which, in turn, benefits the risk-sensitive Aussie. This, along with subdued US Dollar (USD) demand, acts as a tailwind for the AUD/USD pair, which draws additional support from slightly better-than-expected Chinese macro data.

In fact, the official data published by the country’s National Bureau of Statistics (NBS) showed China's Manufacturing PMI came in at 50.5 in June as compared to the 50.2% anticipated. This, however, is below May's reading of 50.9% and does little to ease worries about a slowdown in the world's second-largest economy. Apart from this, bets for additional rate hikes by the Fed lend support to the USD and cap the AUD/USD pair.

In fact, the current market pricing indicates a nearly 85% chance of a 25 bps lift-off at the next FOMC policy meeting in July. Moreover, Fed Chair Jerome Powell reiterated last week that borrowing costs may still need to rise as much as 50 bps by the end of this year. This remains supportive of elevated US Treasury bond yields, which supports prospects for the emergence of some USD dip-buying and keeping a lid on the AUD/USD pair.

Market participants now look forward to the release of the US ISM Manufacturing PMI, due later during the early North American session, which marks the start of this week's key US macro releases scheduled at the beginning of a new month. The key focus, meanwhile, will remain on the FOMC meeting minutes on Wednesday and the closely-watched US monthly employment details - popularly known as the NFP report on Friday