The Australian Dollar extended its losing streak against the US Dollar for the fourth consecutive day on Jan. 10, with the AUD/USD pair hovering near two-year lows.
The currency faced renewed pressure following ANZ Bank's forecast of a 25-basis-point rate cut by the Reserve Bank of Australia in February.
Traders turned their attention to the upcoming US labour market data, including the Nonfarm Payrolls for further insights into monetary policy direction.
The Australian Dollar found no support from China's latest inflation figures, which underscored rising deflationary risks.
Given Australia's strong trade ties with China, any significant changes in Chinese economic conditions could have ripple effects on the Australian market.
Domestically, Australia's retail sales data offered limited relief.
Retail sales, a key indicator of consumer spending, rose by 0.8% month-on-month in November 2024, an improvement from October 2024’s 0.5% growth (revised from 0.6%).
However, the figure fell short of the anticipated 1.0% rise, adding to the AUD's woes.
Adding to the pressure, the trimmed mean—a critical measure of core inflation—fell to an annual 3.2% from 3.5%, bringing it closer to the RBA's target range of 2% to 3%.
Markets remain divided on the RBA's next move, with some anticipating a rate cut in February, while others expect the central bank to wait until April.
A 25-bps rate cut in April is already fully priced in by markets.