• Australian Dollar holds ground amid improved risk appetite on Tuesday.
• Australia’s Westpac Consumer Confidence fell by 2.4% in April, against the previous decline of 1.8%.
• US Dollar receives downward pressure as volatility prevails ahead of US CPI.

The Australian Dollar (AUD) continues to hold onto its gains registered in the previous session despite the subdued Westpac Consumer Confidence released on Tuesday. The decline in the US Dollar (USD) provided support for the AUD/USD pair, which could be attributed to the improved risk appetite.

The Australian Dollar strengthens amid a higher domestic equity market. The ASX 200 Index positions for gains as investor attention remains fixed on the Reserve Bank of Australia’s (RBA) interest rate decisions. Investors are growing more doubtful about the need for the RBA to cut interest rates in 2024, especially after positive US data bolstered expectations that the Federal Reserve (Fed) may prolong its higher interest rate stance.

The US Dollar Index (DXY) encounters hurdles as the Federal Reserve carefully evaluates incoming data, prompting fluctuations in the market. Traders are eagerly anticipating the release of the US Consumer Price Index data scheduled for Wednesday. Additionally, attention will be focused on Australian Consumer Inflation Expectations and Chinese consumer prices slated for Thursday.