Ella 
In early Asian trading on Monday, the Australian dollar/US dollar strengthened, staying near 0.6535 for six consecutive days. AUD/USD’s gains have been bolstered by a hawkish outlook following last week’s Consumer Price Index (CPI) inflation data. The Fed’s interest rate decision and U.S. non-farm payrolls (NFP) data will be the focus this week.
The U.S. inflation rate rose modestly in March, which means the Federal Reserve will continue to maintain high interest rates for some time. Data released by the U.S. Bureau of Economic Analysis on Friday showed that U.S. inflation, measured by the personal consumption expenditures (PCE) price index, climbed to 2.7% in March from 2.5% in February, higher than the expected 2.6%. Meanwhile, the core PCE price index, which excludes volatile food and energy prices, was steady in March at an annual rate of 2.8%, above expectations of 2.6%. In March, the U.S. PCE price index and core PCE price index both increased by 0.3% on a monthly basis.
The Federal Reserve is expected to hold interest rates steady at a range of 5.25%-5.50% on Wednesday. Investors expect the Federal Reserve to initiate rate cuts in September as recent labor market and inflation data showed a surprising upward trend.
In the Australian dollar, traders increased bets that the Reserve Bank of Australia may raise the cash rate again before cutting interest rates. Inflation in Australia last week was higher than expected, erasing the prospect of an interest rate cut this year. Futures markets put the chance of easing interest rates at the Reserve Bank of Australia’s December meeting at just 19%. The Reserve Bank of Australia maintained a hawkish stance, boosting the Australian dollar (AUD) and providing a boost to AUD/USD.
