• AUD/USD edges higher to near 0.6575 in Monday’s early Asian session. 
• The RBA’s hawkish tone and hotter-than-expected Chinese CPI inflation data support the Aussie. 
• Rising Middle East geopolitical tensions might cap the pair’s upside. 

The AUD/USD pair trades on a stronger note near 0.6575 during the early Asian session on Monday. The hawkish messages from the Reserve Bank of Australia  (RBA) and hotter Chinese inflation data provide some support to the Aussie. However, the escalating geopolitical tensions in the Middle East might cap the upside for the pair. 

The RBA left the interest rate unchanged at 4.35% for a sixth consecutive meeting last week. RBA governor Michele Bullock noted the upside risks to inflation and will not hesitate to raise rates if it needs to. Westpac analysts forecast the first-rate cut will occur in February 2025 from the previously expected November 2024. The hawkish stance of the Australian Central Bank is likely to underpin the Australian Dollar (AUD) in the near term. 

Additionally, China’s Consumer Price Index (CPI) rose by a more-than-expected 0.5% in July from a year ago due to seasonal factors like weather, lifting the AUD. Nonetheless, concerns about sluggish Chinese demand persist and might limit the pair’s upside. Traders will take more cues from Chinese Retail Sales and Industrial Production on Thursday. Also, the Australian employment data will be released.