AUDUSD remains steady over 0.660 amid a slightly optimistic market mood.
The AUDUSD pair is up 0.13%, trading near 0.6615 at the time of writing in the European session on Wednesday.
Due to stubborn inflation data, the Federal Reserve may modify its expectations for the number of rate reduction this year.
The Australian dollar rises as the US dollar remains flat. Despite the fact that the February US Consumer Price Index (CPI) data has raised questions about Federal Reserve (Fed) rate cuts at the June policy meeting.
S&P500 futures rose in the London session. Reflecting a heightened risk appetite among market players. 10 year US Treasury yields decreased to 4.14 percent. The US Dollar Index (DXY) remains trapped in a tight range, barely below 103.00. As investors reconsider the likelihood of three rate cuts this year, as forecast by the Federal Reserve in December.
Fed policymakers are anticipated to keep interest rates unchanged until they are confident. That inflation would decline steadily to the goal rate of 2%. The consumer price inflation numbers issued for the first two months of 2024 show no signs of lessening. Prompting Fed policymakers to reconsider their projections for three rate cuts.
In contrast, Fed Chair Jerome Powell stated in Congressional testimony last week that the central bank is close to concluding that inflation will return to 2%.
Sticky inflation may keep RBA interest rates higher for longer.
Meanwhile, the Australian The dollar is anticipated to follow market forecasts for the Reserve Bank of Australia’s (RBA) interest rate announcement, which is due for next week. The RBA is likely to hold the Official Cash Rate (OCR) at 4.35%. Former RBA Governor Philip Lowe said in an interview with 9 Australia on Tuesday that stubborn inflation may compel policymakers to hold interest rates higher for longer than expected.
