Anna 
The Australian Dollar (AUD) commences the week on a positive note, extending its four-day winning streak against the US Dollar (USD). While the USD received a boost from better-than-expected Producer Price Index (PPI) data on Friday, dovish comments from former St. Louis Federal Reserve (Fed) president, James Bullard, curtailed the greenback’s gains, contributing to the strength of the AUD/USD pair.
Adding to the upward momentum is the S&P/ASX 200 index reaching an all-time high, propelled by increased mining stocks amid robust metal prices. This positive sentiment is further reinforced by expectations that the Reserve Bank of Australia (RBA) will maintain its current monetary policy stance throughout 2024. Westpac’s outlook, driven by the anticipation of a resilient Australian economy, low unemployment rates, and healthy corporate sector balance sheets, suggests the RBA might adopt a less restrictive approach in 2025.
The US Dollar Index (DXY) continued its decline as US Treasury yields moderated on Friday, and with US banks closed for the Presidents’ Day holiday, limited movement is anticipated in the USD. As the Australian Dollar benefits from a confluence of positive economic factors, market participants will closely monitor developments in the coming days for potential shifts in the AUD/USD pair.
