• AUD/USD moves higher to 0.6750 as US Dollar faces a wrath due to strong speculation for Fed rate-cuts in September.
• Fed Williams communicated the need for more good inflation to gain confidence for Fed rate cuts.
• Aussie Employment data will provide fresh guidance on RBA interest rates.

The AUD/USD pair climbs to near 0.6750 in Wednesday’s European session. The Aussie asset strengthens as the US Dollar (USD) posts a fresh almost four-month low due to firm speculation that the Federal Reserve (Fed) will begin lowering interest rates from the September meeting.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 103.30. According to the CME FedWatch tool, expectations for a rate-cut move in September appear to be certain. The tool also shows that the Fed will cut interest rates twice this year against one signaled by officials in their latest dot plot.

A rate-cut move in September seems as a done deal as the Consumer Price Index (CPI) report for June suggested that the progress in disinflation has resumed after reversing in the first quarter.

Meanwhile, Fed policymakers have also acknowledged that the central bank has made some progress in inflation but reiterated that they want to gain greater confidence before cutting interest rates.