The Australian dollar is declining against the US dollar on Tuesday. The current AUDUSD exchange rate stands at 0.6598.
Investors are awaiting the details of the Australian government's annual budget, which will be released today. The Labor Party government is anticipated to announce a new yearly budget surplus while the economy maintains high employment levels. The market will be particularly interested in details such as reducing the targeted cost of living, which could lower overall inflation.
Australia's current consumer price index is 3.6% and is expected to return to the 2-3% target by the end of the year.
If this scenario materialises, the Reserve Bank of Australia will lower the interest rate sooner than expected in the market. At its meeting last week, the RBA kept the cost of borrowing unchanged and refrained from making aggressive comments on inflation.