Australian dollar may encounter problems as the RBA is projected to maintain current interest rates.

The Australian Dollar (AUD) ends its losing skid on Monday. The AUDUSD pair gains strength as the US Dollar (USD) retraces its gains on lower US Treasury yields. However, market investors are cautious ahead of the Reserve Bank of Australia’s (RBA) policy decision, which is planned for Tuesday. Additionally, investors are waiting for interest rate decisions from both the People’s Bank of China (PBoC) and the United States. The US Federal Reserve (Fed) is anticipated to issue figures on Wednesday.

Softer commodity prices are tracked by Australia’s S&P/ASX 200 Index.

The Australian dollar may have come under pressure as the S&P/ASX 200 Index fell for the third straight day. Mining and energy companies are driving the decline, indicating lower commodity prices. Meanwhile, dangerous Tropical Cyclone Megan is forecast to bring damaging gusts and heavy rain to Australia’s far north. Evacuations are ongoing, and a major manganese mine has shuttered in preparation for the cyclone’s arrival.

The US dollar retraces gains on lower US Treasury yields.

The US Dollar Index (DXY) falls amid market confusion over the Federal Reserve, which is likely to keep interest rates higher in response to recent inflation pressures. On Tuesday, traders will most likely focus on housing data from the United States (US).

Daily Market Movers: Australian. The dollar strengthens despite market risk aversion.

According to Bloomberg, Westpac expects the Reserve Bank of Australia to keep its cash rate at 4.35% at Tuesday’s meeting.
RBA Governor Michele Bullock recently claimed that Australia’s inflation is mostly “homegrown” and “demand-driven,” owing to labor market resilience and rising pay inflation. The RBA does not predict that this event will occur until 2026.

Chinese retail sales (YoY) grew by 5.5%, compared to previous estimates of 5.2% and 7.4%.

In February, China’s retail sales (YoY) climbed by 5.5%, compared to previous estimates of 5.2% and 7.4%.
Chinese industrial production (YoY) increased by 7.0%, exceeding the market expectations of 5.0% in February and 6.8% in the prior month.
According to the CME FedWatch Tool, the probability of a rate cut in March is now at 1.0%, while it has reduced to 6.1% in May. The chances of a rate cut in June and July are lower, at 56.3% and 75.2% respectively.
The preliminary US Michigan Consumer Sentiment Index for March fell to 76.5 from 76.9. This fall contrasts with assumptions that it would remain stable.
The Federal Reserve Board of Governors reported that Industrial Production (MoM) increased by 0.1% in February, compared to the projected reading of level 0.0% and a 0.5% fall the prior month.
The US Core Producer Price Index (PPI) increased by 2.0% year on year in February, remaining above the 1.9% predicted. The monthly report indicated a 0.3% growth compared to 0.5% the previous month, above the projected 0.2% figure.
The US PPI (YoY) rose. by 1.6% in February, above the previous estimates of 1.1% and 1.0%, respectively. PPI (MoM) climbed by 0.6%, above market expectations and the preceding gain of 0.3%.
US retail sales increased by 0.6% monthly, falling short of the predicted 0.8% in February and reversing a previous dip of 1.1%. The Retail Sales Control Group increased to a flat 0.0%, compared to the preceding fall of 0.3%.