Anna 
The Australian Dollar (AUD) maintains stability with a positive sentiment, undeterred by the lower-than-expected Wage Price Index (Q1) released by the Australian Bureau of Statistics on Wednesday, which serves as an indicator of labor cost inflation. The AUD’s resilience can be attributed to improved risk appetite in the market.
In response to economic pressures, the Australian Budget for 2024-25 has returned to a deficit after a surplus of $9.3 billion in the previous fiscal year (2023-24). The government aims to address headline inflation and alleviate living costs by allocating funds to reduce energy bills, rent, and income taxes.
Meanwhile, the US Dollar Index (DXY), which measures USD performance against major currencies, continues to experience losses for the second session. Investors have processed higher-than-expected US Producer Price Index data for April while awaiting the Consumer Price Index report scheduled for Wednesday.
Federal Reserve Chair Jerome Powell has forecasted a sustained decline in inflation, expressing reduced confidence in the disinflation outlook compared to previous assessments. Powell remains optimistic about Gross Domestic Product (GDP) growth, projecting a rate of 2% or higher, citing the strength of the labor market as a driving factor in this positive outlook.
