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03-13-2024

Australian Dollar receives upward support from higher ASX 200 amid a firmer US Dollar

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  • Australian Dollar exhibits sideways movement with a bias to recover recent losses.

 

  • Australia's S&P/ASX 200 Index mirrors the gains seen on Wall Street overnight, avoiding the upbeat US Inflation data.

 

  • US CPI YoY and MoM rose by 3.2% and 0.4%, respectively, in February.

 

The Australian Dollar (AUD) is experiencing sideways movement with a tendency to recover recent losses. On Wednesday, the AUD shows signs of consolidation, reflecting a sentiment that hints at potential recovery. This comes even as the S&P/ASX 200 Index continues its upward trajectory, mirroring the gains seen on Wall Street overnight. However, the upbeat momentum is somewhat tempered by lower commodity prices, which could exert downward pressure on the Aussie Dollar.

 

Investor sentiment remains cautiously optimistic following the release of positive Consumer Price Index (CPI) data from the United States. The US CPI for February rose by 3.2% year-over-year (YoY) and 0.4% month-over-month (MoM), surpassing expectations. This strong CPI report has dampened hopes for a near-term rate cut by the Federal Reserve, thereby strengthening the US Dollar (USD) and creating headwinds for the AUD/USD pair.

 

On Tuesday, the Australian Dollar suffered losses against the US Dollar due to the stronger-than-expected US CPI report. This scenario has traders shifting their focus to upcoming economic indicators, specifically the US Core Producer Price Index (PPI) and Retail Sales data, scheduled for release on Thursday. These data points are likely to influence market sentiment and the trajectory of the AUD/USD pair in the near term.

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