• AUD/USD has printed a fresh day's high above 0.6770 amid a further decline in the USD Index.
• US President Joe Biden has been criticized for late negotiations with Republicans over raising the debt ceiling.
• Aussie quarterly Retail Sales are expected to contract by 0.4% vs. the former contraction of 0.2%.

The AUD/USD pair has refreshed its day’s high at 0.6770 in the Asian session. The upside bias for the Aussie asset is the outcome of multiple headwinds for the US Dollar.  Mounting fears of US banking jitters, uncertainty over the debt ceiling crisis, and unimpressive Nonfarm Payrolls (NFP) report are barricading the US Dollar from any meaningful recovery.

S&P500 futures are showing a subdued performance in the Asian session. The 500-US stock basket witnessed stellar buying interest on Friday after the release of a modest increment in payrolls data supported by the context of neutral interest rate policy from the Federal Reserve (Fed) for its June monetary policy.

The US Dollar Index (DXY) has slipped further and is expected to test the previous week’s low around 101.00. US President Joe Biden has been criticized for late negotiations with Republicans over raising the debt ceiling as the US Treasury Department is worried that it will be out of funds in early June and won’t be able to address its payment obligations. This would not only downgrade the outlook of the United States economy but will cost millions of jobs and a large scale of economic activities.

It would be valuable to note the decline in President’s spending initiatives that Republicans managed to make against raising the debt ceiling.

Furthermore, Wednesday’s Consumer Price Index (CPI) data will be keenly watched. As per the consensus, the monthly headline Consumer Price Index (CPI) accelerated by 0.4% in April against a 0.1% pace recorded in March. The core CPI gained by 0.3%, at a slower pace than recorded for March at 0.4%.

On the Australian Dollar front, investors are awaiting the release of the quarterly Retail Sales data. The preliminary report indicates that quarterly retail demand would contract by 0.4% vs. the former contraction of 0.2%. This might allow the Reserve Bank of Australia (RBA) to keep interest rates steady as declining retail demand is not supportive of policy tightening.