Australian dollar remained higher due to hawkish sentiment surrounding the RBA’s policy announcement.

On Tuesday, the Australian Dollar (AUD) extended its winning streak to the fifth straight session, fueled by hawkish attitude toward the Reserve Bank of Australia (RBA). This upbeat outlook strengthens the Aussie Dollar, providing support for the AUDUSD pair.

The Australian Central Bank is expected to leave the cash rate unchanged at 4.35% at its May meeting later today.

The Australian central bank is widely expected to retain the cash rate at 4.35% in May. We will meet later in the day. However, markets are betting. That it would take a more hawkish position. Fuelled by last week’s inflation statistics that exceeded forecasts, according to The Australian Financial Review.

The US Dollar continues under pressure due to a prevalent risk appetite spurred by Fed rate cutting forecasts.

The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, is under pressure. Following the announcement of soft US labor data on Friday. This trend has sparked optimism that the Federal Reserve (Fed) may decrease interest rates in 2024.

Daily Market Movers: The Australian Dollar extends advances thanks to an enhanced risk appetite.

Australian Dollar (AUD) extended its winning streak to the fifth straight session, fueled by hawkish attitude toward the Reserve Bank of Australia (RBA). According to a Bloomberg article, Richmond Federal Reserve (Fed) President Thomas Barkin warned on Monday. That higher interest rates will further limit US economic growth and assist reduce inflation pressures. This brings them closer to the central bank’s 2% aim. Barkin also emphasized that the strong job market allows the Fed to guarantee that inflation is regularly heading lower before reducing borrowing costs. However, he cautioned that continuing inflation in the housing and services sectors could keep price increases high.

The University of Melbourne reported that TD Securities Inflation (YoY) fell to 3.7% in April, down from 3.8% the previous month. Meanwhile, the monthly interest rate stayed unchanged at 0.1%.

China’s Caixin Services Purchasing Managers’ Index (PMI) for April fell marginally to 52.5 from 52.7 in March.

China’s Caixin Services Purchasing Managers’ Index (PMI) for April fell marginally to 52.5 from 52.7 in March, as expected. Nonetheless, it represents the 16th consecutive month of growth in service activity. The favorable trend has the potential to boost Australia’s market, given its position as one of China’s major exporters.
Nonfarm Payrolls data released on Friday indicated that the US economy added 175,000 jobs in April, less than the projected 243,000 and a sharp deceleration from March’s 315,000 job gains.
The Judo Bank Australia Composite Purchasing Managers Index (PMI) fell in April, reflecting a little slower increase in Australian private sector output. Business activity grew mostly in the service sector, while manufacturing production decreased.
Analysts at Commonwealth Bank and Westpac predict that the RBA’s interest rate will peak at 4.35% in November 2023 before falling to 3.10% in December 2025.
Australia’s central According to a Reuters survey of analysts, the bank is anticipated to keep its key policy rate at 4.35% for the fourth consecutive meeting on Tuesday, most likely until the end of September. These experts expect only one interest rate drop this year.