• AUD/USD ticks down marginally to near 0.6550 amid upbeat US Dollar.
• Dovish remarks from Fed officials are expected to weigh on the US Dollar.
• Investors await US data and RBA minutes.

The AUD/USD pair edges lower to near 0.6550 during the late European trading session on Friday. The Aussie pair faces a slight selling pressure as the US Dollar holds onto gains driven by recent political developments in Japan and France.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near its over two-month high around 99.50.

However, the outlook for the US Dollar remains uncertain as investors expect the Federal Reserve (Fed) to deliver more interest rate cuts this year. According to the CME FedWatch tool, traders see an 81.5% chance that the Fed will cut interest rates by 25 basis points (bps) in each of its remaining two monetary policy meetings this year.

Additionally, Fed officials are also arguing in favour of extending the monetary expansion cycle amid growing labour market risks. "We’re to a point now where the softening in the labor market looks like it could be more worrisome if we don’t risk manage it, San Francisco Fed Bank President Mary Daly said on Thursday, Reuters reported.

In Friday’s session, investors will focus on the preliminary Michigan Consumer Sentiment Index and Consumer Inflation Expectations data for October, which will be published at 14:00 GMT. The Consumer Sentiment Index is expected to have deteriorated to 54.2 from 55.1 in September.

Going forward, the next trigger for the Australian Dollar (AUD) will be the Reserve Bank of Australia (RBA) minutes for the September policy meeting, which will be released on Tuesday. In the policy meeting, the RBA held its Official Cash Rate (OCR) steady at 3.6% amid upside inflation risks.

“Components of the monthly Consumer Price Index (CPI) are little higher than expected, inflation is not running away,” RBA Governor Michelle Bullock said.