The Australian Dollar (AUD) continues to strengthen against the US Dollar (USD) for the third consecutive session, despite weaker Consumer Inflation Expectations data released on Thursday. Consumer expectations of future inflation during the next 12 months fell to 3.6% in March, down from 4.6% in February—the highest level since April 2024.
The AUD/USD pair rises as the US Dollar faces headwinds amid ongoing tariff uncertainty from US President Donald Trump and growing concerns over a potential US recession. However, the pair's gains may be capped after Trump ruled out exempting Australia from his 25% tariffs on aluminum and steel, key exports valued at nearly $1 billion.
Prime Minister Anthony Albanese affirmed on Wednesday that "Australia will not impose reciprocal tariffs on the US," emphasizing that retaliatory measures would only increase costs for Australian consumers and drive inflation higher.
Investors remain focused on the Reserve Bank of Australia's (RBA) policy outlook, particularly after last week's robust economic data lowered expectations of further rate cuts. Economic growth exceeded forecasts, marking its first acceleration in over a year.
Source: FXStreet
