The Australian Dollar (AUD) continued its decline against the US Dollar (USD) for the fourth straight day on Thursday (30/1). However, the AUD/USD pair strengthened after the release of the Export Price Index. Data from the Australian Bureau of Statistics showed export prices rose by 3.6% quarter-on-quarter in Q4 2024, reversing a 4.3% decline in Q3 and marking the first increase since Q4 2023.

The Australian Import Price Index rose by 0.2% QoQ in Q4 2024, bouncing back from a 1.4% decline in Q3 and beating market expectations of a 1.5% decline. The rise was mainly driven by surging Gold prices, which hit an all-time high in October as investors sought safe-haven assets amid ongoing economic uncertainty.

ANZ, CBA, Westpac and now National Australia Bank (NAB) are all anticipating a 25 basis point (bps) interest rate cut from the Reserve Bank of Australia (RBA) in February. NAB had previously forecast a rate cut in May but has now brought its projection forward to the RBA's February meeting.

Easing inflationary pressures towards the end of 2024 have fuelled speculation that the Reserve Bank of Australia could consider a rate cut in February. The RBA has kept the Official Cash Rate (OCR) at 4.35% since November 2023, stressing that inflation must "sustainably" return to its 2%-3% target range before any policy easing.

The AUD/USD pair weakened as the US Dollar (USD) strengthened across the board. The US Federal Reserve (Fed) kept interest rates unchanged on Wednesday, as expected, but gave little indication of a potential rate cut this year, boosting the USD.

Traders are awaiting the release of US fourth-quarter Gross Domestic Product (GDP) growth data, due on Thursday. Market consensus is for annual GDP growth to slow, with the forecast at 2.6%, down from 3.1% previously. Inflation concerns persist, with the Q4 GDP Price Index expected to rise to 2.5%, up from 1.9%. (AL)

Source: FXstreet