Ella 
The Australian dollar attempted to extend its gains for a third straight session on Friday as the U.S. dollar threatened to enter a downward trajectory. Federal Reserve Chairman Jerome Powell reiterated the Fed’s stance on his second day of testimony before the U.S. Congress. Powell hinted at possible cuts to borrowing costs at some point this year. But Fed Chairman Jerome Powell stressed that such action would depend on whether inflation is consistent with the Fed’s 2% goal.
Affected by the improvement in market sentiment driven by the surge in the stock market, the Australian dollar continued to rise. The S&P/ASX 200 index hit another record high following a surge in technology shares on Wall Street overnight. The positive momentum was fueled by expectations that major central banks may implement interest rate cuts this year, further boosting market confidence.
The Australian market has remained resilient despite concerns over lower-than-expected domestic economic growth in the fourth quarter and a weaker-than-expected trade balance surplus. These economic indicators underline the RBA’s argument for considering a rate cut in the near term. There is market speculation that the Reserve Bank of Australia may start cutting interest rates as early as August, with total rate cuts expected to reach 45 basis points in 2024.
