• Australian Dollar could lose ground as investors adopt caution ahead of US inflation data.
• Australia's NAB Business Confidence Index fell to 0 in February, from the previous reading of 1.
• US CPI (MoM) is expected to rise by 0.4% in February, compared to 0.3% prior.

The Australian Dollar (AUD) exhibits sideways movement with a bias to extend its losses against a stable US Dollar (USD) on Tuesday. The AUD/USD pair faces a challenge as investors adopt a cautious approach ahead of a pivotal inflation report from the United States (US), which could impact the Federal Reserve's monetary policy outlook.

Australia’s S&P/ASX 200 Index showed improvement on Tuesday, supported by gains in financial and gold stocks, which could support the Aussie Dollar (AUD). Additionally, Sarah Hunter, Assistant Governor (Economics) at the Reserve Bank of Australia (RBA), addressed a panel at the AFR Business Summit on Tuesday, discussing fourth-quarter GDP in line with forecasts. Hunter mentioned that recent inflation data also matched expectations, with inflation remaining the primary hindrance to household consumption.

The US Dollar Index (DXY) remains steady, consolidating its gains as markets exercise caution ahead of US Consumer Price Index (CPI) data. Expectations suggest an increase in February month-over-month, although the yearly index is anticipated to be unchanged. A stronger-than-expected CPI report would likely diminish hopes of a near-term rate cut by the Federal Reserve (Fed). This could bolster the US Dollar, potentially creating headwinds for the AUD/USD pair.