AUD/USD sticks to modest gains above mid-0.6400s, Fed rate decision eyed

• AUD/USD posts modest gain just above the mid-0.6400s ahead of the US key event.
• The Federal Reserve (Fed) is widely expected to hold the interest rates in the 5.25% to 5.5% range.
• Reserve Bank of Australia's (RBA) said additional tightening may be necessary if inflation proves more persistent than anticipated.
• Market players await Australian Westpac Leading Index, the People's Bank of China (PBoC) interest rate decision and Fed decision.

The AUD/USD pair edges higher during the early Asian session on Wednesday. Market players await the highly-anticipated the Federal Reserve (Fed) monetary policy meeting. The pair currently trades around 0.6455, gaining 0.04% on the day.

The Federal Reserve (Fed) is scheduled to announce the two-day monetary policy meeting on Wednesday and is widely expected to hold the interest rates in the 5.25% to 5.5% range.This, in turn, might exert some selling pressure on the Greenback (USD) and acts as a tailwind for the AUD/USD pair. On Tuesday, the US Census Bureau revealed that the US housing industry revealed mixed results in August. Housing Starts fell 11.3%, while building permits surged 6.9%.

On the Aussie front, the release of the Minutes from the Reserve Bank of Australia's (RBA) September monetary policy meeting revealed on Tuesday that additional tightening may be necessary if inflation proves more persistent than anticipated. However, the case for maintaining the status quo was stronger, and recent data have not materially altered the economic outlook.

Furthermore, the People's Bank of China (PBoC) will announce the interest rate decision on Wednesday in Asian session. Chinese central bank is expcted to keep its benchmark lending rate unchanged. Any signs from the Chinese authorities about the additional stimulus plans to deal with the the property crisis might lift the China-proxy Australia Dollar (AUD) against the USD.

Looking ahead, market participants will keep an eye on the Australian Westpac Leading Index for August for fresh impetus ahead of the People's Bank of China (PBoC) interest rate decision later in Asian session. The attention will shift to the Fed interest rate decision on Wednesday at 18:00 GMT. These events could give a clear direction to the AUD/USD pair.