• AUD/USD edges higher to 0.6500 amid the weakness of USD.
• The US Consumer Price Index (CPI) fell 3.2% YoY in October vs. 3.7% prior.
• The Australian Wage Price Index will be released, which is expected to rise 1.3% QoQ in Q3.
• Traders will monitor US Retail Sales and Producer Price Index (PPI) on Wednesday.

The AUD/USD pair holds above 0.6500 during the early Asian session on Wednesday. The weaker US inflation data boosts the risk-on mood across markets, which increases investor appetite for riskier assets like the Australian dollar (AUD). The pair currently trades around 0.6503, down 0.05% on the day.

The US inflation, as measured by the Consumer Price Index (CPI) came in worse than market expectations by dropping 3.2% YoY in October from 3.7% in the previous reading. In response to the data, the US Dollar (USD) fell broadly, the lowest since early September. The 10-year US Treasury yield slid sharply from 4.60% to 4.48%, the lowest since September 26. These downbeat figures dampen expectations that the FOMC would increase interest rates further, and the odds of rate hikes in December and January are now zero. This, in turn, drags the USD lower and acts as a tailwind for the AUD/USD pair.

Chicago Federal Reserve (Fed) President Austan Goolsbee said on Tuesday that the path in lowering inflation continues and economic growth remains robust. While Richmond Fed President Thomas Barkin stated he is not convinced that inflation is on a "smooth glide path" to the 2% target.

Market participants will monitor Australia’s Wage Price Index for Q3 on Wednesday, which is expected to rise 1.3% QoQ in the third quarter. These data will have a considerable impact on the Reserve Bank of Australia's (RBA) expectations. Later in the day, the US Retail Sales and Producer Price Index (PPI) will be due. Traders will take cues from the data and find trading opportunities around the AUD/USD pair.