Ella 
The Australian dollar attempted to snap a three-day losing streak amid a weak U.S. dollar, which could be attributed to lower U.S. bond yields. However, AUD/USD came under downward pressure following the Reserve Bank of Australia’s dovish interest rate statement.
The Reserve Bank of Australia has chosen a strategy of relying on economic data for monetary policy to deal with the ongoing challenges posed by inflation and the slowdown in Australia’s economy. The Reserve Bank of Australia’s decision on Tuesday to raise the official cash rate (OCR) from 4.10% to a 12-year high of 4.35% highlights this strategy. The move comes in direct response to the latest inflation data, which saw Australia’s monthly inflation rate rise significantly by 5.6%.
The AUD/USD currency pair has faced challenges this week amid tepid market sentiment, with investors waiting for fresh clues before trading, especially with the Federal Reserve’s upcoming decision in December.
Caution prevailed as Federal Reserve officials denied the prospect of a rate cut. Investors may look to the upcoming release of U.S. initial jobless claims for last week to understand its potential impact on the market. Additionally, market participants expected insights from Federal Reserve Chairman Jerome Powell, who will participate in a panel discussion later in the day on “Monetary Policy Challenges in the Global Economic Environment.”
