The AUD/USD pair trades with mild losses around 0.6790 on Wednesday during the early Asian session. The risk-off mood amid escalating geopolitical tensions in the Middle East weighs on riskier assets like the Australian Dollar (AUD). Investors will take more cues from the Australian monthly Consumer Price Index (CPI) on Wednesday for fresh impetus.

The rising Middle East geopolitical risks might boost the safe-haven flows, benefiting the Greenback for the time being. Thousands of troops from special units mobilized for a large-scale operation in the northern West Bank, which is anticipated to take several weeks, per the local news agency Aljazeera.

However, the US Federal Reserve's (Fed) rate cut expectations are likely to cap the upside of the US Dollar (USD) and provide some support to AUD/USD. The US Fed is anticipated to cut rates in September, with a quarter-point move expected after Fed Chair Jerome Powell said on Friday that it was time to cut rates.

Consumer confidence in the United States continued to improve in August, with the Conference Board's (CB) Consumer Confidence Index climbing to 103.3 in August from 101.9 (revised from 100.3) in July. Nonetheless, this data provides little to no impact on the US D's valuation.

On the Aussie front, the monthly Australian CPI inflation is estimated to ease to 3.4% YoY in July from 3.8% in June. The softer-than-expected outcome could trigger market speculation that the Reserve Bank of Australia (RBA) will lower interest rates this year.

Source : FX Street