AUD/USD gathers strength toward 0.6650 on weaker US Dollar

• AUD/USD kicks off the new week on a positive note around 0.6632 on Monday. 
• The US Durable Goods Orders came in better than expected; the UoM Consumer Sentiment Index was above the consensus.
• The hawkish stance of the RBA might support the Aussie in the near term ahead of Australian key data this week.

The AUD/USD pair edges higher to 0.6632 during the early Asian session on Monday. The uptick in the pair is supported by the softer US Dollar (USD). The Australian Retail Sales and Consumer Price Index (CPI) will be the highlight this week. 

On Friday, US Durable Goods Orders rose by 0.7% MoM in April from the downward revised of 0.8% in March, better than the expectation of -0.8%. The University of Michigan Consumer Sentiment Index came in at 69.1 in May from 67.4 in April, above the market consensus of 67.5. Inflation expectations for one year rose slightly to 3.3% from 3.2%, while five-year inflation expectations eased to 3% from 3.1%. 

A series of stronger-than-expected economic data and the hawkish comments from the US Federal Reserve (Fed) officials dampen the near-term rate cuts expectation. The financial market moved away from the chance of a policy easing in September and now expecting just one cut by the end of the year.

On the Aussie front, inflation in Australia is stubbornly high, which prompted the Reserve Bank of Australia (RBA) to consider hiking interest rates at its latest board meeting. This, in turn, lifts the Australian Dollar (AUD) and creates a tailwind for the AUD/USD pair. Apart from this, the preliminary Australian Judo Bank Manufacturing remained unchanged at 49.6 in May, while Services PMI came in at 53.1 in May from 53.6 in the previous reading.