• AUD/USD trades back and forth around 0.6550 amid a focus on multiple Australian/US macroeconomic events.
• Inflation in Australia is expected to have risen steadily by 1%.
• The Fed is seen leaving interest rates unchanged, with a dovish guidance.

The AUD/USD pair continues to trade sideways around 0.6550 in Tuesday’s European session. The Aussie asset consolidates as investors have sidelined ahead of the Aussie Q2, the monthly Consumer Price Index (CPI) for June, and the interest rate decision by the Federal Reserve (Fed), which are scheduled for Wednesday.

Market sentiment favors risky assets on expectations that the Fed will deliver dovish guidance on interest rates, leaving them unchanged in the range of 5.25%-5.50%. S&P 500 futures have posted decent gains in London trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades flat near 104.60. 10-year US Treasury yields edge lower to near 4.17%.

Investors see Fed Chair Jerome Powell acknowledging progress in inflation and its return towards the path of 2% on behalf of policymakers in the monetary policy statement. Fed Powell is also expected to highlight concerns over the United States (US) labor market strength