Ella 
In early Asian trading on Thursday, the AUD/USD currency pair continued its range-bound trend near the 0.6700 mark. Investors await Thursday’s Australian trade balance, followed by U.S. inflation data, as measured by the consumer price index. AUD/USD is currently trading around 0.6699, with an intraday increase of 0.04%.
Light economic data on Wednesday prompted financial markets to focus on how central banks have priced in interest rate cuts this year. However, U.S. inflation on Thursday could spark market volatility. Markets expect headline inflation to rise 0.2% monthly and core inflation to rise 0.3% monthly.
Investors are betting on five rate cuts from the Fed in 2024, largely defying forecasts of just 75 basis points of easing from the Fed. On Thursday, New York Fed President John Williams said financial markets continue to be highly sensitive to new data. Williams added that the Fed is in good shape and now is the time to consider interest rates going forward. The Fed will eventually be forced to return to neutral policy levels.
The Australian Bureau of Statistics disclosed on Wednesday that Australia’s monthly inflation rate fell to 4.3% in November from 4.9% in the previous month, the lowest level since January 2022. The data supports the view that the cash rate will remain unchanged at the February meeting.
Looking ahead, market participants will focus on Australia’s trade balance due on Thursday, with a trade balance expected to show a surplus of A$7.5 billion. In the United States, the US inflation report and the number of US initial jobless claims last week will be released.
