• Australian Dollar marked a four-week high at 0.6644 on Tuesday.
• Australian currency strengthens on investors’ doubts surrounding the RBA’s rate cuts in 2024.
• US Dollar receives downward pressure ahead of US CPI and FOMC minutes.

The Australian Dollar (AUD) attempts to extend gains for the third consecutive session on Wednesday. The AUD/USD pair reached a four-week high at 0.6644 in the previous session as the US Dollar (USD) faced a struggle, which could be attributed to the decline in the US Treasury yields.

The Australian Dollar gains strength as investors become increasingly skeptical about the necessity for the Reserve Bank of Australia (RBA) to implement interest rate cuts in 2024, given the anticipation of the Federal Reserve (Fed) extending its higher interest rate stance.

The Reserve Bank of Australia has indicated that further rate hikes are unlikely, requiring more confidence in the inflation outlook before considering rate cuts. Furthermore, the focus will shift to the release of the US Consumer Price Index (CPI) data and the FOMC Minutes later in the North American session.

Daily Digest Market Movers: Australian Dollar rises amid doubts surrounding RBA’s rate cuts

• Australia’s Westpac Consumer Confidence Index for April indicated a decline of 2.4%, compared to the previous decrease of 1.8%.
• Commonwealth Bank anticipates three 25 basis points (bps) interest rate cuts by the end of the year, starting from September.
• Westpac predicts that interest rate cuts will commence in September, while NAB and ANZ believe it won’t be until November.
• Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari emphasized the importance of the central bank’s commitment to combating inflation. Kashkari stressed that despite the current inflation rate hovering around 3%, the Fed must strive to bring it back down to the target level of 2%.
• According to the CME FedWatch Tool, the probability of a 25-basis point rate cut by the Fed in June has slightly increased to 53.5%. However, the likelihood of a rate cut in July has decreased to 49.9%.
• The US headline CPI is expected to accelerate in March, whereas the core measure is expected to show a cooling down.
• On Friday, the US Nonfarm Payrolls (NFP) report revealed a notable increase of 303K jobs in March, surpassing both expectations of 200K and the previous reading of 270K. US Average Hourly Earnings rose by 0.3% month-over-month in March, meeting expectations.

Technical Analysis: Australian Dollar hovers around 0.6620 with a bullish sentiment

The Australian Dollar trades around 0.6620 on Wednesday. Technical analysis suggests a bullish sentiment for the AUD/USD pair. The pair could see more gains as the Moving Average Convergence Divergence (MACD) is positioned above the centerline and shows a divergence above the signal line. Key resistance is observed around the major level of 0.6650, followed by March’s high of 0.6667. On the downside, key support is identified around the 23.6% Fibonacci retracement level of 0.6605 and the psychological level of 0.6600. Further support lies at the nine-day Exponential Moving Average (EMA) of 0.6584 and the major support level of 0.6550.