• AUD/USD is seen consolidating as bulls pause for a breather ahead of the key US inflation data.
• The divergent Fed-RBA policy expectations might continue to act as a tailwind for spot prices.
• The currency pair remains on track to register strong gains for the second consecutive week.

The AUD/USD pair enters a bullish consolidation phase during the Asian session on Friday and oscillates in a range around the 0.6600 round figure, just below a nearly two-month high, touched the previous day. Meanwhile, the fundamental backdrop suggests that the path of least resistance for spot prices remains to the upside, though bulls opt to wait for the crucial US inflation report before positioning for an extension of a two-week-old uptrend.

The US Personal Consumption Expenditure (PCE) Price Index for October will be published later today. The core gauge is seen as the US Federal Reserve's (Fed) preferred inflation gauge and will be looked upon for cues about the future rate-cut path. This, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the AUD/USD pair. In the meantime, the divergent Fed-Reserve Bank of Australia (RBA) policy outlooks should continue to act as a tailwind for the currency pair.

The recent US macro data pointed to a gradual cooling of the economy and signs of a softening labor market. Adding to this, comments from several Fed officials suggest that another interest rate cut in December is all but certain. In fact, traders are now pricing in a nearly 90% chance that the US central bank will lower borrowing costs by 25 basis points (bps) next week. This has been a key factor behind the USD's underperformance and should keep a lid on any attempted recovery from its lowest level since late October, though on Thursday.

Meanwhile, RBA Governor Michele Bullock admitted before a parliamentary committee earlier this week that inflation is not yet sustainably back within the central bank's 2% to 3% annual target band. Bullock also warned that the central bank is looking very hard at recent inflation numbers, and if the price pressure turns out to be permanent, it would have implications for the future path of monetary policy. This, in turn, fueled speculations that the RBA might hike interest rates next year, which underpins the Aussie and supports the AUD/USD pair.