• AUD/USD holds positive momentum around 0.6565 in Monday’s early Asian session. 
• Several Fed officials stated that they are worried about the risk of cutting rates too soon rather than keeping them high for too long.
• The Reserve Bank of Australia (RBA) said in its meeting minutes that another rate hike cannot be ruled out. 
• The Australian monthly Consumer Price Index (CPI) and US Gross Domestic Product Annualized (Q4) will be closely watched events.

The AUD/USD pair holds above the mid-0.6500s during the early Asian session on Monday. The pair maintain the upward momentum, with the US Dollar Index (DXY) hovering around the 104.00 mark. The market is likely to be quiet on Monday, and investors await the Australian monthly CPI on Wednesday for fresh impetus. AUD/USD currently trades near 0.6565, gaining 0.04% on the day. 

Several Federal Reserve (Fed) officials emphasized last week that they are worried about the risk of cutting interest rates too soon or too much rather than keeping them high for too long and damaging the economy. The US central bank wants to see further evidence that inflation is on a path to its 2% target before lowering interest rates. That being said, the higher-for-longer rate narrative in the US might cap the downside of the US Dollar (USD) and act as a headwind for the AUD/USD pair. 

The markets anticipated the Fed to cut its rate in May or June meeting, while the Fed’s Christopher Waller hinted that the first rate cuts could come later this year. Investors will take more cues from the Core Personal Consumption Expenditures Price Index (Core PCE), the Fed's preferred inflation measure, which is estimated to show an increase of 0.4% MoM and 2.8% YoY in January. 

On the Aussie front, the Reserve Bank of Australia (RBA) kept its cash rate steady at 4.35% earlier this month. The Australian central bank indicated in its meeting Minutes that inflation would return to target within a reasonable timeframe, even though this process would take some time. However, other rate hikes cannot be ruled out. 

The Australian monthly Consumer Price Index (CPI) for January will be due on Wednesday, and the Retail Sales will be released on Thursday. On the US docket, the Gross Domestic Product Annualized (Q4) and Core CPE will be in the spotlight this week, due on Wednesday and Thursday, respectively,