• AUD/USD retreats from 0.6740 as traders brace for the US inflation data for September.
• The US inflation data will influence the Fed's likely interest rate action in the remainder of the year.
• Australia’s Consumer Inflation Expectations decelerated to 4% in October.

The AUD/USD pair falls back after a short-lived pullback to near 0.6740 in Thursday’s European session. The Aussie pair faces pressure as the market sentiment turn cautious ahead of the United States (US) Consumer Price Index (CPI) data for September, which is scheduled at 12:30 GMT.

S&P 500 futures have posted some losses in European trading hours, exhibiting a risk-aversion mood. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, holds onto gains near the seven-week high of 103.00.

Economists expect the headline CPI to have grown at a slower pace of 2.3% against 2.5% in August, with the core CPI – which excludes volatile food and energy prices – rising steadily by 3.2%.

Investors will pay close attention to the US inflation data for fresh cues about the Federal Reserve’s (Fed) interest rate outlook for the remaining year.

In the Asia-Pacific region, the Melbourne Institute has reported that one-year forward Consumer Inflation Expectations for October has softened significantly to 4% from 4.4% in September. Investors will focus on how soft inflation expectations will influence market expectations for Reserve Bank of Australia’s (RBA) likely policy action in the last quarter of the year. Currently, traders expect the RBA to leave its Official Cash Rate (OCR) at 4.35% by the year-end.