AUD/USD slides to near 0.6470 as US Dollar gains, PCE Inflation in focus

• AUD/USD drops to near 0.6470 as the US Dollar rises after Fed Cook's lawsuit announcement.
• Investors expect Trump's attempt to politicize Fed had dampened US Dollar's dominance.
• Inflation in Australia grew at a faster-than-expected pace of 2.8% in July.

The AUD/USD pair falls to near 0.6470 during the European trading session on Wednesday. The Aussie pair declines as the US Dollar (USD) attracts bids after Federal Reserve (Fed) Governor Lisa Cook announced that she will file a lawsuit against her termination by United States (US) President Donald Trump on Monday.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades 0.44% higher to near 98.65.

However, the outlook of the US Dollar has become uncertain as doubts among investors over the credibility of the Fed going forward have increased.

Market experts believe that decisions on interest rates from Fed Cook's replacement would be biased towards US President Trump's economic agenda.

On the economic front, investors await the US Personal Consumption Expenditure Price Index (PCE) data for July, which will be released on Friday. The core PCE inflation data, which is closely tracked by Fed officials as it excludes volatile food and energy items, is expected to have grown at an annual pace of 2.9%, faster than the prior release of 2.8%.

Meanwhile, the Australian Dollar fails to attract bids even as Australian Monthly Consumer Price Index (CPI) data for July has come in stronger-than-projected. The inflation data rose at an annual pace of 2.8%, faster than expectations of 2.3% and the prior reading of 1.9%.