• Australian Dollar appreciates on weaker US Dollar despite improved US Treasury yields.
• Australian Trade Balance (MoM) reduced to 11,027M in February, from 10,743M prior.
• Fed Chair Powell indicated that the Fed is prepared to lower borrowing costs "at some point this year."
• February’s US ADP Employment Change increased to 140K from 111K prior, falling short of the expected 150K.

The Australian Dollar (AUD) continues to advance for a second consecutive session on Thursday, largely driven by weakness in the US dollar (USD). This weakness stems from comments made by Federal Reserve (Fed) Chair Jerome Powell during his testimony before the House Financial Services Committee. Powell indicated that the Fed is prepared to lower borrowing costs "at some point this year," following the delivery of the semi-annual Monetary Policy Report. However, the recent escalation of the regional banking crisis in the United States (US) could potentially prompt Powell to expedite this process.

Australia's economy expanded less than expected in the fourth quarter, as revealed by the latest Gross Domestic Product (GDP) data released on Wednesday. Moreover, the Trade Balance showed that the surplus was reduced in February. These outcomes limit the gains for the AUD/USD pair and support the case for the Reserve Bank of Australia (RBA) to adopt an easing bias. Furthermore, The Commonwealth Bank of Australia (CBA) has reaffirmed its forecast of 75 basis points in rate cuts for this year following the release of the disappointing GDP figures.

The US Dollar Index (DXY) experienced a decline driven by lower US Treasury yields. Federal Reserve Chair Jerome Powell stated that the US economy is not on the verge of a recession and anticipates inflation to gradually approach the 2% target. Powell emphasized the Fed's commitment to data-driven decisions, stating that interest rates would only be reduced when there is convincing evidence. Further insights from Powell are anticipated during his remarks on Thursday.