AUD/USD picks up from 0.6340 lows, the broader trend remains negative

• The Aussie has bounced up from year-to-date lows with the negative bias intact.
• Investors are wary of betting against the US Dollar with USD data on tap.
• The RBA softened its us¡ual hawkish tone on Tuesday and increased pressure on the Aussie.
   

The Australian Dollar trimmed some losses during Wednesday’s European session after hitting fresh year-to-date lows at 0.6340. The pair, however, remains vulnerable with investors reluctant to risk ahead of the release of the US CPI report.

Consumer prices in the US are expected to have accelerated slightly in November, which endorses the cautious rhetoric by Fed President Powell and suggests that the bank might be targeting a higher terminal rate next year.

On Tuesday, the Treasury Secretary, and former Fed Chair, Janet Yellen, warned that Trump’s tariffs might derail the progress on inflation, bolstering the case for a shallow easing cycle in 2025.

In Australia, the RBA rattled markets on Tuesday with an unexpected dovish shift in its monetary policy statement. The board showed confidence in inflation which boosted hopes of interest rate cuts in February, and increased selling pressure on the AUD.