The Australian Dollar (AUD) is striving to recover from earlier losses on Wednesday but faces challenges amid a relatively stable US Dollar. The volatile performance of the ASX 200 index might have offered some support to the AUD, aiding the AUD/USD pair. However, the robustness of the US Dollar is exerting downward pressure on the pair.

The Reserve Bank of Australia (RBA) opted to maintain interest rates at 4.35% on Tuesday, a decision consistent with its recent stance. RBA Governor Michele Bullock emphasized the ongoing battle against inflation but refrained from providing specific details about potential rate adjustments, keeping options open.

The US Dollar Index (DXY) continues its upward trend, supported by improved US Treasury yields. Investors are eagerly awaiting the Federal Reserve’s (Fed) interest rate decision, widely anticipated to maintain rates within the range of 5.25% to 5.5%.

Market Movers:

  • The ANZ-Roy Morgan Australian Consumer Confidence index stands at 81.7, slightly lower than the previous week.
  • The People’s Bank of China (PBoC) maintained its interest rate at 3.45%.
  • Chinese and Australian officials discussed bilateral relations, emphasizing positive progress.
  • Probability of a Fed rate cut in May stands at 6.3%, increasing for June and July.
  • US economic indicators, including Building Permits and Housing Starts, exceeded expectations.
  • The US Michigan Consumer Sentiment Index declined slightly in March.
  • Industrial Production in the US increased by 0.1% in February.
  • US Core Producer Price Index remained above expectations.

Technical Analysis:

  • AUD trades near 0.6540, facing resistance at 0.6550 and the nine-day Exponential Moving Average (EMA) at 0.6561.
  • Support levels are at 0.6528 and 0.6500, with potential downside pressure towards March’s low at 0.6477.

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