Anna 
The Australian Dollar (AUD) is currently trading in a sideways pattern with a tendency to recover recent losses against the stable US Dollar (USD). The AUD/USD pair is facing challenges as investors adopt a cautious stance ahead of a crucial inflation report from the United States (US), which has the potential to influence the monetary policy outlook of the Federal Reserve.
Australia’s S&P/ASX 200 Index showed improvement on Tuesday, primarily supported by gains in financial and gold stocks, providing some support to the Aussie Dollar (AUD). Furthermore, Sarah Hunter, Assistant Governor (Economics) at the Reserve Bank of Australia (RBA), addressed a panel at the AFR Business Summit, discussing fourth-quarter GDP in line with forecasts. Hunter highlighted that recent inflation data met expectations, with inflation remaining a significant obstacle to household consumption.
The US Dollar Index (DXY) is maintaining stability, consolidating recent gains as markets exercise caution ahead of the US Consumer Price Index (CPI) data release. Expectations suggest an increase in the February month-over-month CPI, although the yearly index is anticipated to remain unchanged. A stronger-than-expected CPI report could diminish hopes of an imminent rate cut by the Federal Reserve (Fed), potentially strengthening the US Dollar. This, in turn, may create headwinds for the AUD/USD pair.
