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AUD/USD resumes ascent to probe the 0.6800 round number for the fourth time since the beginning of March, as markets become cautiously optimistic in response to declining US inflation and positive Chinese sentiment. However, apprehension ahead of Australia and China's inflation indicators, scheduled for release between 01:00 and 01:30 AM GMT on Thursday, may pose a challenge to Aussie pair buyers on Thursday morning.

Inflation in the United States, as measured by the Consumer Price Index (CPI), fell to 4.9% YoY in April, below market expectations of a reprinting of the 5.0% inflation mark, signifying the first print below 5.0% in two years. In contrast to the prior measurements of 0.1%, the MoM figures matched the optimistic 0.4% forecasts. In addition, the CPI excluding food and energy, also known as the core CPI, matched the market consensus of 5.5% and 0.4% on an annual and monthly basis, respectively, compared to 5.6% and 0.4% previously.

Reuters reports that, in response to the data, Fed funds futures traders are pricing in a pause prior to the anticipated rate decreases in September.

Aside from this, US policymakers were unable to reach an agreement on the debt ceiling during their first attempt, but they set the ball in motion by allowing office members to debate the details and try again on Friday, which boosted market sentiment. "Detailed talks on raising the United States government's $31.4 trillion debt ceiling began on Wednesday, with Republicans continuing to insist on spending cuts," reported Reuters, a day after the first meeting between Democratic President Joe Biden and top congressional Republican Kevin McCarthy in three months.

On a separate page, Australian Treasurer Jim Chalmers was quoted as expressing a willingness to establish more cordial relations with China and extolling Australia's most recent annual budget, which was released the day before.

Alternately, China military officials were quoted as rejecting a meeting proposal from US military officials, which joined banking troubles and fears of debt ceiling expiration to weigh on market sentiment and the AUD/USD exchange rate prior to the release of key Australian-China data.

In this context, S&P 500 Futures post modest gains following Wall Street's mixed close, while US Treasury bond yields struggle to establish distinct trends.

AUD/USD traders await Australia's Consumer Inflation Expectations for May as well as China's CPI and the Producer Price Index (PPI) for April before the US PPI for the month in question. Moreover, risk catalysts and central bankers, such as the Bank of England (BoE), may contribute to an active day in the future.

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