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Australian Dollar Steady Ahead of Budget

The Australian dollar remained steady at $0.628 on Tuesday, holding a sideways trend as traders awaited the government’s general budget announcement. The budget is expected to shift back into a deficit after two consecutive years of surpluses, raising concerns over fiscal policy adjustments.

Investors are also looking ahead to next week’s Reserve Bank of Australia (RBA) monetary policy meeting, where the central bank is widely expected to keep rates unchanged. However, market pricing suggests a two-thirds chance of another rate cut in May, following the RBA’s first reduction in over four years last month.

Despite this, the RBA has signaled caution on further easing, stating that additional rate cuts are not guaranteed. Policymakers remain focused on inflation dynamics and labor market conditions, which will be key factors in future decisions.

On a global scale, market sentiment remains uncertain due to US trade policy developments. While some optimism grew over President Donald Trump’s potential selective tariff approach, his latest pledge to impose levies on automobiles, pharmaceuticals, and other industries has increased uncertainty in financial markets.

Moving forward, the Australian dollar’s direction will depend on budget details, RBA policy signals, and global risk sentiment, particularly US trade developments and their impact on global economic conditions.

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