Australian Dollar extends its losses following the softer-than-expected Aussie CPI.
Australia’s Monthly Consumer Price Index (YoY) rose by 3.4%, slightly below the expected 3.5%.
US Dollar gains ground on risk aversion ahead of Personal Consumption Expenditures.
The Australian Dollar (AUD) extends its losses for the second successive session on Wednesday. The AUD/USD pair experiences losses following softer-than-expected Aussie consumer prices, potentially prompting the Reserve Bank of Australia (RBA) to consider a dovish stance on the interest rate trajectory. This outlook is exerting downward pressure on the AUD.
Australia’s Monthly Consumer Price Index (YoY) rose by 3.4% in February, consistent with previous levels but slightly below the anticipated 3.5%. Still, the latest reading pointed to the lowest since November 2021. The AUD has faced downward pressure following the release of Westpac Consumer Confidence on Tuesday, which dipped 1.8% to 84.4 in March 2024 from February's 86.0, easing from 20-month highs.
The US Dollar Index (DXY) saw its second consecutive day of gains amid a risk-off sentiment, driven by anticipation surrounding the upcoming release of US Personal Consumption Expenditures (PCE) scheduled for Friday. However, the decline in US Treasury yields may be attributed to the expectations surrounding the US Federal Reserve (Fed) regarding potential rate cuts. This sentiment could potentially limit the advances of the US Dollar.
