The AUD/USD pair stays in a tight range below the immediate resistance of 0.6700 from almost three weeks. The upside in the Aussie asset appears to be restricted as the Reserve Bank of Australia (RBA) has not leaned strongly towards raising interest rates further despite price pressures appear to have revamped again.

Australia’s Monthly Consumer Price Index (CPI) has been accelerating for the last three months after progress in the disinflation process stalled in the December-February period. In May, the inflation measure grew strongly by 4.0% from expectations of 3.8% and the prior release of 3.6%.

Meanwhile, the US Dollar (USD) remains on the backfoot as financial markets expect the Federal Reserve (Fed) to start reducing interest rates after the September meeting. According to 30-day Federal Funds pricing data from the CME FedWatch tool, the Fed is also expected to deliver two rate cuts this year.

On Tuesday, Fed Chair Jerome Powell said at the European Central Bank (ECB) Forum of the Central Banking in Sintra, Portugal that the central bank has made quiet a bit progress on inflation and recent data shows that disinflation has resumed. In spite of that policymakers want to see inflation declining for months before cutting interest rates.

In today’s session, investors will focus on the ADP Employment Change and the ISM Services PMI reports for June. The ADP is expected to show that 160K job-seekers were hired by private employers, slightly higher than May’s reading of 152K. The ISM Services PMI is estimated to have expanded at a slower pace of 52.5 from the former release of 53.8.  

This week, the major trigger for the US Dollar will be the Nonfarm Payrolls (NFP) data for June, which will be published on Friday.

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