Ella 
The Australian dollar rose against the U.S. dollar for a second straight day on Monday as overall market risk appetite improved, even as expectations for a rate cut from the Federal Reserve fell. Meanwhile, investors are eagerly anticipating Wednesday’s release of Australia’s monthly consumer price index for clues on domestic monetary policy.
The Reserve Bank of Australia (RBA)’s latest meeting minutes showed that the board found it difficult to predict future changes in the cash rate, acknowledging that recent data increased the possibility that inflation would remain above the 2-3% target for an extended period, so the Australian dollar may move higher.
The dollar weakened on Friday after the University of Michigan released its 5-year consumer inflation forecast for May. The reading edged back to 3.0%, missing expectations of 3.1%. Although the consumer confidence index was revised up to 69.1 from the preliminary reading of 67.4, it still hit its lowest level in six months. The data could help bolster investor expectations that the Federal Reserve may cut interest rates.
The probability of the Fed delivering a quarter-point rate cut in September has fallen to 44.9% from 49.0% a week ago, according to the CME FedWatch tool. It’s worth noting that U.S. markets will be closed due to the Memorial Day bank holiday on Monday.
