The Australian Dollar (AUD) hovers against the US Dollar (USD) on Wednesday after experiencing losses in the previous session. The AUD/USD pair faced challenges, driven by the broadly stronger US dollar (USD).

Traders now focus on the release of crucial US November Consumer Price Index (CPI) data, which are expected to be released later in the North American session.

The US CPI inflation is estimated to rise to 2.7% YoY in November from 2.6% in October.

Meanwhile, the core CPI, excluding Food & Energy, is expected to increase 3.3% YoY. Any indications of stalled progress could significantly diminish the likelihood of a Federal Reserve's (Fed) rate cut, potentially boosting the US Dollar.

Traders are now pricing in nearly an 85.8% chance of Fed rate reductions by 25 basis points on December 18, according to the CME FedWatch Tool.

Source: FXStreet