• Australian Dollar loses ground amid a stronger US Dollar due to improved US yields.
• RBA minutes revealed that the board did not consider the possibility of increasing interest rates.
• US ISM Manufacturing PMI rose to 50.3 in March, reaching its highest level since September 2022.

The Australian Dollar (AUD) showed sideways movement, staying defensive on Tuesday. The US Dollar (USD) received a boost as US Treasury bond yields surged overnight due to the positive ISM Manufacturing PMI data from the United States (US). This development created headwinds for the AUD/USD pair. The Reserve Bank of Australia (RBA) March meeting minutes revealed that the central bank did not entertain the possibility of raising interest rates.

The Reserve Bank of Australia is expected to maintain the current cash rate until at least November due to inflation rates persisting higher than those in other countries, coupled with a tight job market. Despite concerns over potential fluctuations in inflation, experts suggest that this trajectory is unlikely to prevent the RBA from eventually implementing monetary policy easing measures.

The US Dollar Index (DXY) continues its winning streak for the fifth successive session. This trend is attributed to traders reducing their expectations for a quarter-point interest rate cut by the Federal Reserve in its June meeting. Nevertheless, Federal Reserve Chairman Jerome Powell indicated on Friday that recent US inflation data is in line with the anticipated path, reinforcing the Fed's position on interest rate adjustments for the year.