Australian dollar falls on risk aversion as markets await Israel’s response to Iran’s onslaught.

The Australian Dollar (AUD) fell for the third straight session on Tuesday likely due to risk aversion. As investors await Israel’s response to Iran’s extraordinary air strike on Saturday. However, the AUDUSD pair has pared losses following conflicting data from China.

The Aussie faces hurdles as the RBA and the Fed’s monetary policy outlooks diverge.

The Australian Dollar confronts obstacles amid fears. That the Reserve Bank of Australia (RBA) may need to reduce interest rates ahead of the United States (USA).

The US dollar strengthened as stronger-than-expected US retail sales data dampened expectations for early Fed rate reduction.

According to the Financial Review, the world’s largest economy’s persistent high inflation raises questions about whether the Federal Reserve can intervene this year. Because of the size of the financial markets it regulates. The Fed has historically led global rate-cutting cycles.

The US Dollar Index (DXY) maintains on an upward trend, possibly influenced by rising US Treasury yields. The stronger-than-expected US Retail Sales report has added to the declining mood toward the Federal Reserve’s (Fed) probable monetary policy easing. Supporting the US Dollar (USD). Investors are expected to pay close attention to US housing data. Which is set to be released on Tuesday, as well as Fed Chair Jerome Powell’s speech at the Washington Forum.

Daily Market Movers: Australian Dollar Depreciates Due to Risk Aversion.

On Thursday, Australian labor market data will be released, including the seasonally adjusted Employment Change and Unemployment Rate for March.
In the first quarter of 2024, China’s GDP increased by 1.6% quarter on quarter, compared to a 1.0% increase in the previous quarter. GDP increased by 5.3% year on year, topping previous expectations of 5.0% and 5.2%.
China’s industrial production (YoY) grew by 4.5% in March, compared to market expectations of 5.4% and 7.0%, respectively.
Chinese retail sales rose 3.1% in March, compared to 5.5% in February. The market expected a 4.5% gain.
Mary Daly, President of the Federal Reserve (Fed) Bank of San Francisco, has stressed that, while there has been tremendous progress in terms of inflation, There is still more to be done. She emphasized the importance of ensuring that inflation is on track to meet the target before making any moves.
According to the CME FedWatch Tool, the likelihood of interest rates being steady at the June meeting has grown to 77.5%, up from 48.5% the previous week.
US retail sales (MoM) rose by 0.7% in March, beating market estimates of 0.3%. The previous reading was corrected to 0.9%, up from 0.6% in February.
US Retail Sales Control Group increased by 1.1%, compared to a previous increase of 0.3%.
At the time of writing, the yields on US 2-year and 10-year Treasury bonds were 4.92% and 4.61%, respectively.