Australian Dollar Rises Amid Positive Economic Data and Eased Geopolitical Tensions

The Australian Dollar (AUD) extended its gains for the fourth consecutive session on Thursday, buoyed by upbeat Australian economic indicators and a more favorable global market sentiment. The AUD strengthened against the US Dollar (USD) following the release of robust Australian Consumer Price Index (CPI) figures on Wednesday. Moreover, easing tensions in the Middle East contributed to improved risk appetite, benefiting risk-sensitive currencies like the AUD and supporting the AUD/USD pair.

The surge in the Australian government bond yields, particularly the 10-year yield, above 4.49%, nearing five-month highs, further bolstered the Australian Dollar. This increase in yield is attributed to growing expectations of a more hawkish stance from the Reserve Bank of Australia (RBA) regarding its interest rate trajectory.

Meanwhile, the US Dollar Index (DXY), measuring the USD against six major currencies, experienced slight downward pressure, potentially influenced by the improved risk sentiment. However, the modest uptick in US Treasury yields may mitigate the losses of the Greenback.

Market attention is also focused on the preliminary Gross Domestic Product Annualized (Q1) data from the United States (US), scheduled for release on Thursday. Expectations suggest a slowdown in the growth rate, and the GDP figures will offer insights into the strength of the US economy, potentially influencing future actions by the Federal Reserve (Fed). A report indicating higher-than-expected figures could lead to speculation that the Fed may postpone its anticipated rate cut cycle.

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