AUD/USD pulls back as upbeat Aussie data meets US political relief

• The Australian Dollar pulls back amid cautious market sentiment despite a sharp improvement in consumer confidence.
• Hawkish remarks from the RBA Deputy Governor support the Aussie, but US political uncertainty limits further gains.
• Investors await the House of Representatives' decision on US government funding.

AUD/USD trades slightly lower on Tuesday, hovering around 0.6530 at the time of writing, down 0.15% on the day. After reaching a weekly high at 0.6540 on Monday, the pair is consolidating amid hesitant market sentiment. Although the overall tone remains mildly positive, investors stay cautious ahead of the US House of Representatives' vote on the government funding bill.

The Australian Dollar (AUD) remains supported by hawkish comments from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser, who warned that premature monetary easing could reignite inflationary pressures. He emphasized the resilience of the economic recovery and reaffirmed the need to maintain tight policy conditions for some time.

Monday's upbeat Westpac Consumer Confidence data strengthened that message. The index surged 12.8% to 103.8 in November, marking its strongest increase in seven years, driven by improving economic conditions and easing price pressures.

In the United States (US), market attention remains centered on the resolution of the government funding impasse. The Senate approved a bill on Monday to reopen the federal government after more than forty days of shutdown, but investors await final approval by the House before taking fresh positions. Meanwhile, the US Dollar (USD) remains broadly steady, supported by expectations of a Federal Reserve (Fed) rate cut in December as labor market indicators continue to show signs of weakness.

Developments in the US fiscal situation and upcoming Fed speeches are likely to guide AUD/USD in the coming days.