AUD/USD tumbles to near 0.6450 amid US-China trade frictions

• AUD/USD slumps 0.5% to near 0.6450 amid trade tensions between the US and China.
• RBA dovish bets have accelerated amid rising Australian jobless rate.
• US-China trade frictions and Fed dovish bets remain drags on the US Dollar's outlook.

The AUD/USD pair trades 0.5% down to near 0.6450 during the European trading session on Friday. The Aussie pair faces intense selling pressure as the Australian Dollar (AUD) underperforms its peers amid growing trade frictions between the United States (US) and China.

Trade tensions between the US and China emerged after Washington imposed additional 100% tariffs on imports from Beijing, which will come into effect from November. Tariff threats from the US came after China announced export control measures on rare earth minerals.

In response, China's Commerce Ministry has stated that Washington's interpretation on Beijing's rare earth export control measures is seriously "distorted and exaggerated", and clarified that the demand of export licence is mere a regulatory measure, and not a ban on export of critical minerals, Reuters reported.

The impact of uncertainty over China's economic outlook remains a major drag on the Australian Dollar (AUD), given that the Australia economy relies heavily on its exports to Beijing.

On the domestic front, Reserve Bank of Australia (RBA) dovish bets have accelerated due to an unexpected increase in the jobless rate. In September, the Unemployment Rate rose to 4.5% against estimates and the prior reading of 4.3%.

Meanwhile, the US Dollar Index (DXY) strives to gain ground after posting a fresh 10-day low near 98.00 earlier in the day. The outlook of the US Dollar (USD) remains bearish amid US-China trade tensions and accelerating Federal Reserve (Fed) dovish bets.