Anna 
The Australian Dollar (AUD) slipped into negative territory on Thursday, relinquishing its earlier intraday gains. However, the AUD/USD pair strengthened amid expectations of interest rate cuts by the Federal Reserve (Fed) in June, contrasting with the Reserve Bank of Australia’s (RBA) indications of potential rate hikes.
RBA Governor Michelle Bullock recently highlighted that Australia’s inflation is primarily “homegrown” and “demand-driven,” driven by robust labor market conditions and rising wage inflation. The RBA does not foresee inflation returning to target levels until 2026.
The downward pressure on the Australian Dollar could be attributed to the lower S&P/ASX 200 Index, driven by declines in the financial sector outweighing gains in iron ore miners. Shares linked to the Australian financial sector, including Westpac Banking, Commonwealth Bank, ANZ Group, National Australia Bank, and Macquarie Group, are experiencing notable losses. Traders are eagerly awaiting the release of the US Core Producer Price Index (PPI) and Retail Sales data scheduled for Thursday, which are expected to impact market sentiment and influence the direction of the AUD/USD pair.
