AUD/USD stays calm around 0.7700 ahead of US inflation data

• AUD/USD seems to have gone into a consolidation phase on Wednesday.
• US Dollar Index posts modest daily gains above 92.00.
• 10-year US Treasury bond yield is up more than 2%.

The AUD/USD pair capitalized on the broad-based USD weakness on Tuesday and gained more than 50 pips. With investors remaining on the sidelines ahead of key macroeconomic events, the pair is posting modest daily losses at 0.7705.

Focus shifts to 10-year US Treasury note auction

Later in the session, the Consumer Price Index (CPI) data from the US will be watched closely by market participants. More importantly, the outcome of the 10-year US Treasury note auction at 1800 GMT will be the key event of the day as US T-bond yields remain the primary driver of the USD's performance against its rivals.

At the moment, the US Dollar Index is up 0.12% on the day at 92.05 and the benchmark 10-year T-bond yield is up 2.4% at 1.565%.

Meanwhile, the S&P 500 Futures are little changed on the day, suggesting that Wall Street's main indexes are likely to start the day in a quiet manner.

Earlier in the day, Reserve Bank of Australia's (RBA) Governor Phillip Lowe noted that they are considering extending the bond purchase programme, making it difficult for the AUD to build on Tuesday's gains.

On Thursday, the Consumer Inflation Expectations data from Australia will be looked upon for fresh impetus.

Technical levels to watch for