Ella 
In early Asian trading on Monday, the AUD/USD currency pair still encountered resistance below the 0.6600 mark. A stronger US dollar and rising US Treasury yields are weighing on AUD/USD. Investors are awaiting fresh impetus from Australian consumer price index (CPI) data and this week’s Federal Reserve meeting. AUD/USD is currently trading around 0.6573, down 0.11% on the day.
Data released by the U.S. Department of Commerce on Friday showed that the U.S. core personal consumption expenditures price index (PCE), an important indicator of the Federal Reserve, increased by 0.2% on a monthly basis in December, compared with the previous value of 0.1%; and at an annual rate of 2.9%, compared with a previous value of 3.2 %. The headline PCE price index, which includes volatile food and energy costs, rose 0.2% on the month and was steady at 2.6% on the year. In addition, the monthly rate of existing home sales in the United States in December was 8.3%, compared with the previous value of -0.3%, which was higher than the market consensus of 1.5%.
Inflation is now cooling, and investors expect the Federal Reserve (Fed) to begin easing policy. Futures traders see a 53% chance of the Fed delivering its first rate cut of the cycle at its March meeting, according to the CME FedWatch tool.
Traders will be closely watching Australian retail sales data for December due on Tuesday. Monthly data on Australian inflation will be released on Wednesday, with inflation expected to slow to an annual rate of 3.7% in December from 4.3% in the previous month. Later on Wednesday, the Federal Reserve will announce an interest rate decision and no changes to the Fed’s monetary policy are expected.
