Anna 
The Australian Dollar (AUD) sustained its upward trajectory for the fifth consecutive session on Friday, bolstered by growing anticipation of a hawkish stance from the Reserve Bank of Australia (RBA). The AUD strengthened against the US Dollar (USD) following TD Securities’ reassessment, pushing back the expected rate cut by the RBA from November to February 2025.
Supporting the Australian Dollar’s gains, Australian government bond yields, particularly the 10-year yield, surged to a 21-week high of 4.59%. This surge was fueled by Wednesday’s release of Australia’s Consumer Price Index (CPI) data, which exceeded expectations and reinforced a hawkish sentiment surrounding the RBA’s monetary policy outlook.
In contrast, the US Dollar Index (DXY), measuring the USD against major currencies, rebounded amid a shift towards risk-off sentiment in the market. However, the Dollar’s gains were tempered by a correction in US Treasury yields, contributing to overall weakness in the Greenback.
Despite mixed preliminary data from the US on Thursday, which included higher-than-expected Core Personal Consumption Expenditures and lower-than-anticipated Gross Domestic Product Annualized for the first quarter, the US Dollar remained subdued.
Investor focus is now directed towards the US Personal Consumption Expenditures (PCE) Price Index data for March, set for release on Friday. This data is poised to draw significant attention as investors assess its implications for inflationary pressures and potential impacts on US monetary policy. The outcome of the PCE data is likely to influence near-term market sentiment and currency movements.
