Anna 
The Australian Dollar (AUD) saw its four-day winning streak come to a halt on Tuesday, facing pressure from an ascending US Dollar (USD). The USD gained support from higher US Treasury yields, causing a retreat in the AUD/USD pair. The Australian currency also experienced downward pressure from a softer Aussie money market. The S&P/ASX 200 index, which had been on a winning streak, saw a pause as mining and energy stocks declined due to weaker commodity prices.
The Reserve Bank of Australia’s (RBA) minutes from the February monetary policy meeting had a limited impact on the Australian Dollar. The RBA Board discussed the possibility of a 25 basis points rate hike or maintaining the status quo. While the data provided the board with increased confidence in inflation returning to target, it was emphasized that it would “take some time” before the board could be sufficiently confident about inflation. Consequently, the board agreed it was appropriate not to rule out another rate hike.
The US Dollar Index (DXY) gained momentum as the market returned from a holiday-extended weekend. Investors are eagerly awaiting the release of the US Federal Open Market Committee (FOMC) Minutes scheduled for Wednesday. ANZ forecasts that the Federal Reserve (Fed) will initiate rate cuts starting in July 2024. The CME FedWatch Tool suggests there is approximately a 53% probability of a 25 basis points rate cut by the US Fed in the June meeting.
