• AUD/USD recovers daily losses and jumps to 0.6670 as US core PCE Inflation declines in May.
• Soft US inflation figures would boost Fed rate-cut hopes.
• The RBA is expected to deliver more rate hikes this year.

The AUD/USD pair revives intraday losses and surges to near 0.6670 in Friday’s New York session after the United States (US) Bureau of Economic Analysis (BEA) published a soft Personal Consumption Expenditure Price Index (PCE) report for May. The report showed that core inflation data grew at a slower pace of 0.1% from the prior release of 0.2%, as expected, on month-on-month. Also, the annual core PCE inflation decelerated expectedly to 2.6% from 2.8% in April.

An expected decline in the US inflation data is expected to spurt expectations for early rate cuts by the Federal Reserve (Fed). The scenario is unfavorable for the US Dollar. The US Dollar Index (DXY) has turned negative and has dropped to 105.80.

The CME FedWatch tool shows that the central bank sees the September meeting as the earliest point for pivoting to policy-normalization. As per the tool, the Fed is expected to deliver two rate cuts this year. Contrary to market expectations, Fed officials forecasted only one rate cut this year.