The AUD/USD is trading below the 0.6200 mark, reflecting cautious market sentiment ahead of key economic data releases. Traders are anxiously awaiting the US Consumer Price Index (CPI) data, which is expected to play a significant role in shaping market directions. The subdued price action of the US Dollar, hovering near a two-year peak, underscores the market's anticipation of the pivotal report.
Meanwhile, the UK's Office for National Statistics is set to release the December CPI data on Wednesday. Analysts expect a rise in the annual UK headline CPI inflation, while the core inflation figure is anticipated to cool slightly. The Bank of England's (BoE) cautious policy approach continues to shape expectations surrounding the report, with potential implications for the Pound Sterling.
The Australian Dollar's downside is cushioned by fluctuating expectations regarding potential rate hikes by the Bank of Japan (BoJ). This uncertainty limits the pullback of the US Dollar, which remains a focal point for investors amid prospects of fewer Federal Reserve rate cuts.
In the Asian session, the USD/JPY remains range-bound near 158.00, as traders await further clarity from the upcoming US CPI report. The outcome of this report is crucial and expected to significantly impact market dynamics.
It is important to note that the views expressed in this article are those of the authors and do not necessarily reflect the official stance of FXStreet. Neither the authors nor FXStreet are registered investment advisors, and this article is not intended to provide investment advice.