Anna 
The Australian Dollar (AUD) has marked its second consecutive day of gains against the US Dollar (USD), benefitting from a weakened greenback attributed to declining US bond yields. The Reserve Bank of Australia’s (RBA) decision to maintain the Official Cash Rate (OCR) at 4.35% on Tuesday, as widely expected, supported the AUD’s upward momentum. RBA Governor Michele Bullock, in the subsequent press conference, refrained from providing clear indications about future policy actions.
While the RBA’s stance was relatively unchanged, the central bank faces limited room for further interest rate hikes due to the ongoing cost-of-living challenges in the Australian economy. The USD’s dip, reflected in the US Dollar Index (DXY), persists despite hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell. Powell, emphasizing vigilance on inflation, downplayed expectations of an imminent rate cut.
Fed Bank of Cleveland President Loretta Mester indicated on Tuesday that the possibility of lowering interest rates later in the year is on the table but urged caution against premature actions. Fed Bank of Philadelphia President Patrick Harker also supported the decision to maintain interest rates, citing a cautious outlook on inflation decline. The combination of these factors has contributed to the AUD/USD pair’s positive trajectory.
