The Australian Dollar extends its losses due to a less hawkish stance by the RBA.
Australian Retail Sales declined in the first quarter, swinging from the previous quarter’s growth.
The US Dollar appreciated due to the sentiment of the Fed maintaining higher interest rates for an extended period.
The Australian Dollar (AUD) continues its losing streak on Thursday following the Reserve Bank of Australia (RBA)'s less hawkish stance, especially after last week's inflation data exceeded predictions. Nevertheless, the RBA acknowledged that recent progress in controlling inflation has stalled, maintaining its stance of keeping options open. The RBA opted to keep its interest rate steady at 4.35% on Tuesday.
Australian inflation increased in March, contrary to market expectations of steadiness. Furthermore, RBA Governor Michele Bullock stressed the importance of staying alert to inflation risks. Bullock believes that current interest rates are appropriately positioned to guide inflation back towards its target range of 2-3% by the second half of 2025 and to the midpoint by 2026.
The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, gains ground due to the sentiment of the Federal Reserve’s (Fed) maintaining higher interest rates for longer. This has pushed the US Treasury yields higher, contributing support for the US Dollar (USD).
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