The marginal decline in the US Dollar (USD) seems to have been enough to spark a strong rebound in AUD/USD on Thursday, which reclaimed the area around 0.6660, or two-day highs.
AUD/USD reversed three consecutive daily pullbacks on Thursday. The muted price action in the US Dollar supported the pair's bounce. Australia 's trade surplus widened more than expected in April. The marginal decline in the US Dollar seems to have been enough to spark a strong rebound in AUD/USD on Thursday, which reclaimed the area around 0.6660, or two-day highs.
Currently, money markets are predicting about a 25 bps easing by May 2025, with potential rate hikes still on the table for August. Bolstering the latter, the RBA's Monthly CPI Indicator increased more than expected in April, rising to 3.6% from 3.5%. Given the Fed's commitment to tightening and the likelihood that the RBA will maintain its restrictive stance for an extended period, AUD/USD is expected to consolidate further in the coming months.
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