AUD/USD struggles around 0.6600 as US Dollar trades firmly

• AUD/USD faces pressure above 0.6600 as the US Dollar soars amid French political crisis.
• The Fed is expected to cut interest rates further by 50 bps this year.
• Steady Australian job market remains a drag on RBA dovish expectations.

The AUD/USD pair struggles to extend its upside above the key resistance of 0.6615 during the European trading session on Monday. Earlier in the day, the Aussie pair recovered sharply after a weak opening near 0.6585.

The pair faces slight selling pressure as the safe-haven demand of the US Dollar (USD) increases sharply amid political uncertainty in France. France's new Prime Minister Sebastien Lecornu announces resignation after appointing his cabinet.

During the press time, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, surges 0.8% to near 98.45.

On the domestic front, Washington faces the risk of mass lay-offs amid the government shutdown. On Sunday, US President Donald Trump told reporters, "It's taking place right now," after he was asked when the White House would begin lay-offs, Reuters reported.

Meanwhile, firm Federal Reserve (Fed) dovish expectations are also expected to be a drag on the US Dollar's outlook. According to the CME FedWatch tool, there is an 84% chance that the Fed will reduce interest rates by 25 basis points (bps) in each of its two policy meetings remaining this year.

Though investors have underpinned the Australian Dollar (AUD) against the US Dollar, it is outperforming its other peers as traders doubt that the Reserve Bank of Australia (RBA) will cut interest rates again in the remainder of the year. RBA dovish bets have eased as Australian job market remains upbeat.