As the AUD/USD pair hovers near the 0.6800 level, investors are eagerly awaiting the release of the Australian monthly Consumer Price Index (CPI) data for July. The recent rally in the Aussie asset has hit a pause as market participants brace for the inflation figures, which are expected to show a decline from the previous release.
Despite the temporary slowdown in the AUD’s upward momentum, the appeal of risky assets remains strong, fueled by optimism surrounding potential Fed interest rate cuts in September. This positive market sentiment has helped cushion any downside pressure on the Australian Dollar.
Looking ahead, the direction of the US Dollar will be influenced by the US core PCE inflation data for July, scheduled to be released later this week. Traders are closely monitoring these inflation figures to gauge the likelihood of a rate cut by the Federal Reserve in the upcoming months.
While the market consensus points towards a Fed interest rate cut in September, there is still uncertainty regarding the size of the rate reduction. Traders are divided between a 25-basis points and a 50-basis points cut, with the final decision likely to impact the currency markets.
For more insights on the potential rate cut size and its implications, stay tuned for the release of the US core PCE inflation data later this week. This data will provide valuable information for investors looking to navigate the currency markets amidst ongoing economic uncertainties.
Analysis:
The AUD/USD pair is currently facing resistance near the 0.6800 level as investors await the Australian inflation data for July. The market sentiment remains positive, supported by expectations of Fed interest rate cuts in September. Traders are closely monitoring the US core PCE inflation data for further insights into the potential rate cut size. The outcome of these events is likely to have a significant impact on the currency markets, shaping trading decisions and investment strategies in the coming days.