AUSTRALIAN DOLLAR TRIMS DAILY GAINS ON LOWER ASX 200, STABLE US DOLLAR

• Australian Dollar loses ground as the S&P/ASX 200 Index moves lower.
• Australian Securities Inflation (YoY) rose by 4.0% in February, against the previous increase of 4.6%.
• US Dollar maintains stability on improved US Treasury yields.
• US ISM Manufacturing PMI (Feb) dropped to 47.8 from 49.1, against the anticipated increase to 49.5.

The Australian Dollar (AUD) trims its intraday gains and moves in the negative direction on Monday, influenced by a stable US Dollar amid improved US Treasury yields. Additionally, the decline of the ASX 200 index provided further downward pressure on the Aussie Dollar, thereby undermining the AUD/USD pair. Traders are likely awaiting key Australian data releases, including the Services Purchasing Managers Index (PMI) for February on Tuesday and the Gross Domestic Product (GDP) for the fourth quarter of 2023 on Wednesday.

Australian Dollar has received some support from the Australia Melbourne Institute Inflation for February, which showed a year-over-year rise of 4.0%. However, this increase was lower than the previous rise of 4.6%. Building Permits (MoM) declined by 1.0% in January, contrary to the expected rise of 4.0%. Nevertheless, this figure represented an improvement from the previous decrease of 10.1%. Furthermore, last week's Consumer Price Index (CPI) data indicated a 3.4% rise in January, slightly below the market consensus of 3.5%. This data supported the case for the Reserve Bank of Australia (RBA) to consider cutting interest rates later this year.

The US Dollar Index (DXY) could be driven lower due to a contraction in the United States manufacturing sector observed in February. Despite this contraction, Federal Reserve (Fed) officials have maintained a cautious stance and have not signaled any immediate interest rate cuts, which provides some support for the US Dollar. Investors closely monitor upcoming economic data releases, including the ISM Services PMI data, ADP Employment Change, and Nonfarm Payrolls for February.