Australian Dollar trades mixed in countdown to the Aussie CPI, Fed policy

The Australian Dollar (AUD) demonstrated a mixed performance against its major currency peers, trading marginally lower against the US Dollar (USD) around 0.7180 during the European trading session on Tuesday. The table below shows the percentage change of the Australian Dollar (AUD) against listed major currencies today. Australian Dollar Price Today USD: 0.11%, EUR: 0.08%, GBP: -0.18%, JPY: 0.08%, CAD: 0.15%, AUD: 0.27%, NZD: 0.23% EUR: -0.11%, GBP: 0.04%, JPY: -0.28%, CAD: -0.05%, AUD: 0.02%, NZD: 0.12%, CHF: 0.12% GBP: -0.08%, JPY: 0.04%, CAD: -0.24%, AUD: -0.00%, NZD: 0.07%, CHF: 0.16% JPY: 0.18%, CAD: 0.28%, AUD: 0.24%, NZD: 0.25%, CHF: 0.31% CAD: -0.08%, AUD: 0.05%, NZD: 0.00%, CHF: -0.25%, NZD: 0.07%, CHF: 0.15% AUD: -0.15%, NZD: -0.02%, CHF: -0.12% NZD: -0.27%, CHF: -0.12% CHF: -0.23% The heat map illustrates percentage changes of major currencies against each other, with the Australian Dollar (AUD) as the base currency. The AUD is expected to face high volatility as the Australian Q1 Consumer Price Index (CPI) data is scheduled for Wednesday. Investors will closely monitor the Australian inflation data to assess the Reserve Bank of Australia’s (RBA) monetary policy outlook. In the March policy meeting, the RBA raised its Official Cash Rate (OCR) by 25 basis points to 4.1%, citing high inflationary pressures before the Middle East war increased oil prices. The Australian Bureau of Statistics is expected to show a strong 1.4% increase in price pressures quarter-over-quarter, compared to 0.6% in the previous quarter. On an annualized basis, the Australian CPI rose to 4.1% from 3.6%, signaling further inflationary pressures. A high CPI reading would likely prompt more interest rate hikes by the RBA this year, with an 82% chance of another rate hike in May according to Reuters. The US Dollar Index (DXY) trades near 98.50, having faced selling pressure after strong Monday gains, as Iran’s readiness to end the war with the US diminished safe-haven demand. Meanwhile, the US Federal Reserve’s monetary policy announcement on Wednesday will also influence market sentiment. The Consumer Price Index (CPI), released by the Australian Bureau of Statistics, measures changes in household consumer prices and is a key indicator for the RBA’s monetary policy decisions. Rising consumer prices are generally AUD bullish, as they may prompt the RBA to maintain higher interest rates to meet its inflation target. The data is released nearly 25 days after the quarter ends.