AUD/USD recovers early losses as US Dollar struggles to extend upside

• AUD/USD recovers its early losses as the US Dollar's upside move seems to peak out.
• Investors await the Fed Powell's speech for fresh cues on the monetary policy outlook.
• Australia's Monthly CPI is expectedly to have risen steadily by 2.8%.

The AUD/USD pair claws back its early losses and rebounds to near 0.6590 during the European trading session on Monday. The Aussie pair bounces back as the US Dollar (USD) struggles to extend its three-day winning streak, with investors awaiting Federal Reserve (Fed) Chair Jerome Powell's speech on Tuesday.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades marginally lower to near 97.55.

The US Dollar traded firmly in the last few days, following the monetary policy announcement by the Fed on Wednesday, in which it reduced interest rates by 25 basis points (bps) to 4.00%-25%. The Fed also signaled two more interest rate cuts in the remainder of the year.

On Tuesday, investors will focus on Fed Powell's speech to get more cues on the monetary policy meeting. Market participants would also like to know about whether the Fed will continue reducing interest rates even as inflationary pressures remain well above the central bank's target of 2%.

Meanwhile, the next trigger for the Australian Dollar (AUD) will be the Monthly Consumer Price Index (CPI) data for August, which will be published on Wednesday. The inflation data is expected to have grown steadily at an annual pace of 2.8%. Signs of inflationary pressures remaining persistent could restrict the Reserve Bank of Australia (RBA) from reduce interest rates further.