AUD/USD trades around 0.7145 on Wednesday at the time of writing, down 0.50% on the day.
The pair remains under pressure after the release of several disappointing Australian economic indicators, while solid US data continues to support the US Dollar (USD)
The Australian economy expanded by 0.3% QoQ in the first quarter, down from 0.8% in the previous quarter and below market expectations of 0.5%. On an annual basis, Gross Domestic Product (GDP) grew by 2.5%, missing the consensus forecast of 2.7%. The figures confirm a loss of economic momentum and reinforce expectations that the Reserve Bank of Australia (RBA) will maintain a cautious policy stance.
Investors have also digested a rise in Australia’s Unemployment Rate to its highest level in about four and a half years, alongside softer recent inflation data, reducing the need for further monetary tightening. UOB expects the central bank to keep its cash rate at 4.35% for an extended period, while TD Securities believes one final 25-basis-point rate hike remains possible later this year as growth continues to run above potential. In the United States (US), data released on Wednesday supports the Greenback.