Ella 
The Australian dollar (AUD) remains steady with positive sentiment despite a lower-than-expected wage price index (first quarter) from the Australian Bureau of Statistics on Wednesday. The index is an indicator of labor cost inflation. The appreciation of the Australian dollar can be attributed to improved risk appetite.
Australia’s 2024-25 budget has returned to deficit after recording a $9.3 billion surplus in 2023-24. The Australian government aims to tackle headline inflation and ease cost-of-living pressures by allocating billions of dollars to lower energy bills and rents, while taking measures to lower income taxes.
The U.S. Dollar Index (DXY), which measures the greenback’s performance against six major currencies, continued its decline for a second session. Investors have priced in higher-than-expected U.S. producer price data for April while awaiting a consumer price report due on Wednesday.
Federal Reserve Chairman Jerome Powell expects inflation to continue to decline. Powell expressed less confidence in the outlook for deflation than in previous assessments. He also emphasized that gross domestic product (GDP) growth is expected to reach or exceed 2%, attributing this positive forecast to the strength of the labor market.
