Anna 
The Australian Dollar (AUD) continued its upward momentum for the second consecutive session on Tuesday, supported by improved risk appetite in the market. This positive sentiment followed a relaxation of geopolitical tensions in the Middle East, as indicated by recent statements from Iranian officials, suggesting no immediate plans for retaliation against Israeli airstrikes.
The AUD received a modest boost following the release of Australia’s Judo Bank Purchasing Managers Index (PMI) data, which showed a surge to a 24-month high of 53.6 in April, up from the previous month’s 53.3. This robust PMI figure signals a swift expansion in the Australian private sector during the second quarter, with significant growth driven by the services sector.
Meanwhile, the US Dollar Index (DXY), which measures the USD against six major currencies, faced pressure due to a slight decline in US Treasury yields. Market expectations of the Federal Reserve (Fed) keeping interest rates unchanged in the June meeting have increased to 84.4%, reflecting a more dovish outlook compared to previous weeks. Additionally, comments from Federal Reserve officials suggest a more hawkish stance regarding the trajectory of interest rates in June.
Investors are closely monitoring the US S&P Global Purchasing Managers Index (PMI) for April, with anticipation of improvements in both the manufacturing and services sectors. Attention will shift to Australian economic data on Wednesday, including the Monthly Consumer Price Index and quarterly RBA Trimmed Mean CPI data, which are expected to provide further insights into the economic outlook for the country.
