AUD/USD plummets below 0.6750 as US Dollar extends upside

• AUD/USD falls vertically below 0.6750 amid risk-off mood.
• The US Dollar gains ahead of the US ISM Manufacturing PMI for August.
• The Australian Dollar will be guided by RBA Bullock's speech on Thursday.

The AUD/USD pair plunges below the crucial support of 0.6750 in Tuesday's European session. The Aussie asset has been hit hard as the US Dollar (USD) extends its upside ahead of a slew of United States (US) economic data this week.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, inches closer to a two-week high of 102.00. Meanwhile, the market sentiment remains risk-averse as speculation for the Federal Reserve (Fed) to start reducing interest rates this month aggressively has eased. S&P 500 futures have posted significant losses in European trading hours.

Traders see a little chance that the Fed will cut interest rates by 50 basis points (bps) this month as the revised estimate for the United States (US) Q2 Gross Domestic Product (GDP) growth showed that the economy at a faster pace of 3% than flash estimates of 2.8% on an annualized basis.

For fresh cues on the Fed interest rate cut path, investors await the US Nonfarm Payrolls (NFP) data for August, which will be published on Friday. In Tuesday's session, investors will focus on the US ISM Manufacturing PMI for August, which will be published at 14:00 GMT. Activities in the manufacturing sector are expected to have contracted at a slower pace, with the PMI coming in at 47.5 from July's reading of 46.8.

Meanwhile, the Australian Dollar (AUD) weakens as the current market mood bodes poorly for risky assets. On the domestic front, the major trigger for the Aussie will be the Q2 GDP data, which will be published on Wednesday. The Australian economy is estimated to have expanded at a faster pace of 0.3% than 0.1% growth registered in the January-March period.

This week, investors will also focus on Reserve Bank of Australia (RBA) Governor Michele Bullock's speech on Thursday. Investors will look for fresh cues about whether the RBA will pivot to policy normalization this year.