• AUD/USD struggles to gain any meaningful traction amid a combination of diverging forces.
• Tariff jitters weigh on investors’ sentiment and cap the Aussie amid a modest USD uptick.
• The divergent RBA-Fed outlooks support spot prices ahead of Australian inflation figures.

The AUD/USD pair consolidates in a narrow band around mid-0.7000s during the Asian session on Tuesday, and for now, seems to have stalled the previous day's modest pullback from over a one-week top. Spot prices, however, remain confined in an over one-week-old trading range as traders opt to wait for the monthly Australian consumer inflation figures on Wednesday before placing fresh directional bets.

The crucial data will be the first test of the Reserve Bank of Australia's (RBA) hawkish stance following a 25 basis points (bps) rate hike earlier this month and will play a key role in influencing the Australian Dollar (AUD). In the meantime, renewed trade-related uncertainties continue to weigh on investors' sentiment, which, along with a modest US Dollar (USD) uptick, acts as a headwind for the AUD/USD pair.

However, concerns about the economic fallout from US President Donald Trump's new global levy of 15% and expectations that the US Federal Reserve (Fed) will lower borrowing costs at least two times this year might cap the upside for the USD. Moreover, the dovish Fed outlook marks a significant divergence in comparison to bets for another rate hike by the RBA in 2026, which could support the AUD/USD pair.

Hence, it will be prudent to wait for a breakdown through the short-term trading range support and acceptance below the 0.7000 psychological mark before confirming that spot prices have topped out. Traders now look forward to the US economic docket – featuring the Conference Board's Consumer Confidence Index and the Richmond Manufacturing PMI – for some impetus later during the North American session.