The Australian Dollar (AUD) remained under pressure following Wednesday’s marked rebound vs. the Greenback, motivating AUD/USD to hover around the 0.6430 region on Thursday.
The irresolute movement of the Aussie dollar came on the back of further buying pressure on the US Dollar (USD) amidst investors’ growing speculation of a delayed interest rate hike by the Federal Reserve (Fed), while the mixed results from the Australian labour market report did not help the currency either.
On another front, further gains in both copper prices, which tested the $840.00 region, and iron ore prices, which rose past $107.00, limited the pair’s daily downside.
Regarding monetary policy, the Reserve Bank of Australia (RBA) reaffirmed its commitment to maintaining current policies in the minutes of its March meeting. Additionally, the market currently reflects a 90% likelihood of a 25 bps rate cut in 2024, compared to the nearly 50 bps of total easing observed earlier this month.
It's notable that the RBA, along with the Fed, is among the last G10 central banks anticipated to consider interest rate adjustments this year.
Considering the Fed's resolute stance on tightening monetary policies and the possibility of the RBA initiating an easing cycle later in the year, AUD/USD is likely to encounter sustained downward pressure in both the short and medium terms.
Additionally, recent Chinese results from key fundamentals remained far from reigniting hopes of a sustainable rebound in that economy, which is expected to eventually lend legs to an equally strong and convincing bounce in AUD.