Anna 
The Australian Dollar (AUD) continues to face losses for the second consecutive day on Friday, reaching weekly lows against the US Dollar (USD). The AUD/USD pair depreciates as the USD gains fresh momentum, driven by stronger-than-expected Producer Price Index (PPI) data from the United States (US). This data adds complexity to the outlook for when the Federal Reserve might begin to cut interest rates.
Australia’s S&P/ASX 200 Index also experiences a significant decline, reaching its lowest levels in three weeks amidst a widespread market sell-off. Australian shares follow the downward trend seen on Wall Street overnight, with major banking and iron ore mining shares leading the decline.
The Reserve Bank of Australia (RBA) maintains its stance of potentially raising rates further, with the RBA’s policy decision scheduled for next week. However, this does little to support the AUD amidst the broader market negativity.
Traders are anticipated to keep a close watch on the preliminary US Michigan Consumer Sentiment Index for March, which is due to be released on Friday. This data could provide further insights into consumer sentiment and influence market sentiment towards the USD.
The US Dollar Index (DXY) benefits from the hawkish sentiment surrounding the Federal Reserve, which is considering maintaining its higher interest rates in response to persistent inflationary pressures. Additionally, US Treasury yields have been rising for the past four consecutive sessions, further supporting the USD and consequently undermining the AUD/USD pair.
