Ella 
The Australian dollar’s losses widened on Monday, possibly due to the Reserve Bank of Australia’s less hawkish stance following Tuesday’s decision to keep interest rates unchanged at 4.35%. There is speculation that the Reserve Bank of Australia may take a more hawkish stance, with last week’s inflation data exceeding expectations.
The Australian Treasury announced last Sunday that it forecast inflation could re-enter the Reserve Bank of Australia’s target range by the end of 2024. In the December outlook, officials forecast inflation would fall to 3.75 per cent in mid-2024 and 2.75 per cent in mid-2025, keeping in line with the RBA’s target range.
The U.S. dollar index, which measures the U.S. dollar against six major currencies, continued to rise as the market digested key economic data on Friday and cautious remarks from Federal Reserve officials about cutting interest rates. However, a downward consolidation in U.S. Treasury yields could limit the dollar’s gains.
In the United States, investors will focus on key economic indicators this week that could serve as important market catalysts. Key highlights include the producer price index (PPI), scheduled for release on Tuesday, and consumer price index (CPI) and retail sales reports on Wednesday.
