AUD/USD Declines 0.4% Despite Easing RBA Rate Cut Expectations

AUD/USD has declined 0.4% to 0.6580 despite Australian inflation data reducing expectations for Reserve Bank of Australia rate cuts. The Consumer Price Index rose more than anticipated, prompting markets to scale back aggressive easing bets for 2025. However, the Aussie failed to capitalize on the positive data due to broad US dollar strength and concerns over Chinese economic growth. The pair broke below the key 0.6600 psychological support level, with immediate resistance now at 0.6620. Technical indicators point to further downside pressure, with the RSI approaching oversold territory at 35. Risk sentiment remains fragile as traders await China's manufacturing PMI data, a crucial driver for the commodity-linked Australian dollar. The disconnect between supportive domestic fundamentals and negative price action highlights the dominance of external factors, particularly USD strength and global risk appetite, in determining AUD/USD direction near-term.