The AUD/USD pair faced downward pressure, resulting in a decline.
On Wednesday, the Australian dollar, in tandem with the US dollar, experienced a decrease. The current exchange rate for AUD/USD is at 0.6567.
Inflation data in Australia has strengthened market expectations of an imminent interest rate reduction. The consumer price index in Q4 fell to 4.1% year-over-year, down from the previous 5.4%. On a quarterly basis, the indicator only rose by 0.6%, falling short of the anticipated 0.8% and the previous increase of 1.2%.
Both the weighted median CPI for the quarter and the trimmed-mean CPI have seen decreases, which is considered positive news for the Reserve Bank of Australia but has led to a negative impact on the Australian dollar.
The market sentiment regarding the central bank rates outlook is shifting, with the rate now anticipated to be reduced by June. Investors are assessing this probability at 70%, compared to 50% just a week ago.
The current interest rate set by the Reserve Bank of Australia stands at 4.35% per annum.