- The Aussie might strengthen as the Greenback encounters headwinds, stemming from the Federal Reserve’s Beige Book indicating a softer economic landscape.
- Westpac is forecasting a 0.25% reduction in the cash rate by the Reserve Bank of Australia at their meeting on May 20.
- The US Dollar weakened after the release of Wednesday’s S&P Global Purchasing Managers Index, which presented a mixed picture.
The Australian Dollar (AUD) is holding its ground on Thursday, recovering from losses incurred over the previous two sessions. The AUD/USD exchange rate may experience upward movement as the US Dollar (USD) contends with downward pressure. This pressure arises from the Federal Reserve’s (Fed) Beige Book, which hinted at deteriorating economic circumstances.
The Fed’s Beige Book for April suggests that worries about tariffs have negatively impacted the economic perspective in numerous areas of the United States (US). Consumer expenditure showed inconsistent patterns, and the jobs market displayed indications of easing, with numerous districts reporting stagnant or slightly reduced employment figures.
Westpac is projecting that the Reserve Bank of Australia (RBA) will lower interest rates by a quarter of a percentage point at their meeting scheduled for May 20. The RBA’s monetary policy decisions have relied heavily on incoming data in recent times, making it difficult to predict the Board’s actions beyond the next meeting with complete assurance.
