Ella 
AUD/USD fell for the third day in a row despite poor Australian inflation data. However, AUD/USD failed to gain ground on rising Australian consumer prices as the market maintained a risk-off sentiment. Falling commodity prices prevented AUD/USD from rising.
The minutes of the Reserve Bank of Australia’s (RBA) September monetary policy meeting indicated that further tightening of monetary policy may be needed if inflation is more persistent than expected.
However, the RBA’s case for holding on appears to be more compelling. Therefore, this may also limit the upside potential of AUD/USD.
The U.S. dollar index is trading near its highest level since December. The dollar’s strength was supported by rising U.S. bond yields. The 10-year U.S. Treasury yield has risen to its highest level since October 2007.
Strong U.S. economic data released on Tuesday boosted the dollar. During the reporting period, the U.S. consumer confidence index, building permits and housing price index all improved.
Additionally, most members of the Federal Reserve still expect further interest rate hikes later this year, likely due to strong U.S. economic activity. The Federal Reserve recently decided to keep interest rates unchanged in a range of 5.25% – 5.50%.
