**AUD/USD Holds Near 0.6480 as US Consumer Confidence Declines and Fed Outlook Remains Unclear**
*Based on original reporting by VT Markets. Supplemental information included from ForexLive, Bloomberg, and recent Federal Reserve communications.*
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### Market Overview
The Australian Dollar to US Dollar pair (AUD/USD) has recently hovered around the 0.6480 mark, caught between multiple conflicting forces. A notable drop in US consumer confidence and widespread uncertainty regarding future US Federal Reserve policy movements have become the primary catalysts for recent price action. Market participants are closely watching key economic indicators and central bank statements for clues on the trajectory of both currencies.
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### US Economic Backdrop
**Declining Consumer Confidence:**
– The latest data from the Conference Board reveals a decline in US consumer confidence for June, falling for the second consecutive month.
– The index registered at 100.4, a decrease from May’s revised figure of 101.3.
– Survey respondents cited persistent concerns about inflation, especially in essential categories such as food and gasoline.
– The “Expectations Index,” which gauges consumers’ short-term outlook on income, business, and labor market conditions, dipped further below the recession-warning level of 80, suggesting growing caution among American households.
– This erosion in confidence may translate into softer consumer spending in the coming months, a development that could pressure US economic growth.
**Additional US Data Releases:**
– New home sales figures missed analyst expectations, with monthly sales dropping sharply to an annualized pace of 619,000 units.
– Previous months’ sales data were also revised downward, underscoring persistent weakness in the housing sector amid high lending rates.
**Implications for the Fed:**
– Federal Reserve officials, including Chair Jerome Powell, have reiterated a “data-dependent” approach to future policy moves.
– Market-implied probabilities hint at a possible interest rate cut later in the year, but policymakers remain cautious, citing sticky inflation and a still-resilient labor market.
– Recent Fed communication has emphasized the need for “greater confidence” that inflation will return sustainably towards the 2 percent target before policy easing commences.
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### Australian Economic Factors
**Relative Resilience of AUD:**
– Despite subdued global risk appetite, the Australian Dollar has shown some stability versus the US Dollar, benefiting from robust domestic data and cautious optimism about China’s economic prospects.
– Australia’s latest retail sales rose by 0.6 percent in May, exceeding expectations.
– The Reserve Bank of Australia (RBA) continues to monitor household spending and wage growth, with speculation growing that it may hold rates steady in the near term.
**China Connection:**
– As China is Australia’s largest trading partner, any positive signals from China’s manufacturing and services sector can bolster the Australian Dollar.
– Recent activity surveys suggest a modest rebound in Chinese business sentiment, lending indirect support to the AUD.
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### AUD/USD Technical Outlook
The AUD/USD pair has encountered resistance around the
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