FX.co ★ Australian Dollar Slips as Greenback Firms Up

The Australian dollar dipped to approximately $0.645 on Tuesday, retreating from recent five-month peaks as the US dollar gained strength amidst optimism for US-China trade discussions and investor caution preceding the Federal Reserve's policy decision. The Australian currency also experienced pressure from disappointing domestic building permits data and indications of a slowdown in China's services sector, a significant market for Australian exports. Domestically, the re-election of Prime Minister Anthony Albanese over the weekend provided a degree of reassurance, with the Prime Minister committing to a "disciplined, orderly" government aimed at alleviating cost-of-living challenges and navigating global trade instability. In terms of monetary policy, there is widespread anticipation that the Reserve Bank of Australia will reduce its benchmark interest rate by 25 basis points to 3.85% at its forthcoming May meeting, as policymakers attempt to balance inflationary concerns with diminishing economic momentum.