Anna 
On Tuesday, the Australian Dollar (AUD) continued its decline for the third consecutive session, reflecting possible risk aversion among investors awaiting Israel’s response to Iran’s recent air assault. However, the AUD/USD pair managed to trim some losses following mixed data from China.
The AUD faces headwinds amid concerns that the Reserve Bank of Australia (RBA) may need to cut interest rates ahead of the United States (US). Reports from the Financial Review suggest that persistent high inflation in the US raises uncertainty about the Federal Reserve’s ability to take action this year. Typically, as the world’s most influential central bank, the Fed tends to lead global rate-cutting cycles, affecting sentiments worldwide.
Meanwhile, the US Dollar Index (DXY) remains on an upward trajectory, likely propelled by the increase in US Treasury yields. Better-than-expected US Retail Sales data has further diminished expectations of potential monetary policy easing by the Federal Reserve, providing additional support to the US Dollar (USD). Investors are closely monitoring the release of US housing data scheduled for Tuesday, along with Fed Chair Jerome Powell’s speech at the Washington Forum, which could provide further insights into the central bank’s stance.
