• Australian Dollar weakened on Fed’s hawkish remarks on interest rates trajectory.
• Australia's Retail Sales improved with a 0.3% rise in the fourth quarter against 0.2% prior.
• RBA is expected to maintain the OCR at 4.35% at February’s meeting.
• US Dollar surged as ISM Services PMI rose to 53.4, surpassing the expected figure of 52.0.

The Australian Dollar (AUD) attempts to retrace its recent losses on Tuesday. The pair weakens due to hawkish comments from Federal Reserve (Fed) Chair Jerome Powell, coupled with anticipations of a dovish stance from the Reserve Bank of Australia (RBA) on Tuesday. Additionally, the Aussie Dollar (AUD) faces downward pressure from reduced commodity prices, contributing to the weakening of the AUD/USD pair.

Australian Bureau of Statistics released Retail Sales (QoQ) data on Tuesday, indicating an improvement with a 0.3% rise in the fourth quarter compared to the previous growth of 0.2%. Looking ahead, the Reserve Bank of Australia (RBA) is expected to announce its first monetary policy decision for 2024, with the anticipation of maintaining the Official Cash Rate (OCR) at 4.35%.

The Australian economy is going through a cost-of-living crisis, there appears to be limited room for RBA policymakers to raise interest rates further. Instead, the focal point now shifts to when the central bank might commence reducing interest rates. Investors will closely monitor RBA Governor Michele Bullock's upcoming speech on the monetary policy outlook, seeking additional insights into the central bank's stance and potential future actions