Anna 
In Wednesday’s trading, the Australian Dollar (AUD) extended its losses for the second consecutive session, with the AUD/USD pair experiencing declines. The downward trend followed softer-than-expected Aussie consumer prices, raising the possibility of the Reserve Bank of Australia (RBA) adopting a dovish stance on interest rate trajectory, thereby exerting downward pressure on the AUD.
Australia’s Monthly Consumer Price Index (YoY) for February rose by 3.4%, aligning with previous levels but falling slightly below the anticipated 3.5%. Despite remaining consistent, the latest reading marked the lowest level since November 2021. Moreover, the AUD faced additional downward pressure following the release of Westpac Consumer Confidence data, which showed a 1.8% decline to 84.4 in March 2024 from February’s 86.0, easing from 20-month highs.
Meanwhile, the US Dollar Index (DXY) witnessed its second consecutive day of gains amidst a prevailing risk-off sentiment in the market. This sentiment was largely driven by anticipation surrounding the upcoming release of US Personal Consumption Expenditures (PCE) data scheduled for Friday. However, the decline in US Treasury yields may be attributed to market expectations regarding the US Federal Reserve (Fed) potentially considering rate cuts. Such sentiment could potentially limit the advances of the US Dollar.
