The Australian dollar (AUD) traded lower on Wednesday after giving up recent gains recorded on Tuesday. However, the US dollar depreciated as US Treasury yields came under downward pressure, providing support to the AUD/USD pair. Additionally, a fall in the ASX 200 index also weighed on the Australian dollar.
The Australian Industry Group (AiG) industrial index improved in February, rising to -5.3 from -14.9 previously. Similarly, the manufacturing purchasing managers index was -7, compared with the previous value of -12.6. According to Westpac’s summary of the Reserve Bank of Australia’s (RBA) March meeting minutes, the current cash rate level is considered appropriate for current circumstances, although conditions may change in the future.
The U.S. Dollar Index (DXY) hit a snag after dovish comments from Federal Reserve officials. Cleveland Fed President Loretta Mester said on Tuesday she expects to cut interest rates later this year. Meanwhile, San Francisco Fed President Mary Daly said she believed three interest rate cuts in 2024 seemed “reasonable,” but that this would depend on whether there was further compelling evidence to solidify the decision.
