The Aussie fell in Asia on Wednesday as consumer prices data came in a tad weaker than expected and the market saw a continued steady policy of rates at a record low 1.5% by the Reserve Bank of Australia.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.06% to 98.66. AUD/USD traded at 0.7513, down 0.31%, while USD/JPY changed hands at 111.24, up 0.14%.
Australia reported CPI figures for the first quarter of a 0.5% rise, compared with a 0.6% gain seen quarter-on-quarter and 2.1% rise year-on-year, below the 2.2% increase expected.
"Not a lot in this is going to rock the boat one way or the other," said Michael Blythe, chief economist at CBA.
"Inflation overall looks well contained, so the RBA will be happy with that. Equally, they'll be happy that headline inflation is back within the target band."
Overnight, the dollar traded lower against a basket of major currencies on Tuesday, after the release of mixed U.S. economic data while a rally in the euro weighed on the greenback.
The euro printed fresh five-month highs against the dollar, as investors piled into the single currency for a second straight day after centrist candidate Emmanuel Macron won the first round of the French presidential election.
The bullish euro and weaker-than-expected consumer confidence data weighed on the dollar index.
The Consumer Confidence Index dropped to 120.3 in April, compared to expectations of a fall to 122.5 for the month.
In a separate report, new U.S. home sales surged to an eight-month high in March, which added to the narrative of a strengthening U.S. economy.
Meanwhile, investors look ahead to details on President Donald Trump’s tax reform plan. President Donald Trump said Friday he will unveil a tax plan on "Wednesday or shortly thereafter" that includes a “massive tax cut” for individuals and businesses.
The recent slump in the dollar came against a strong rise in expectations that the Federal Reserve was poised to increase its benchmark rate in June. According to investing.com’s Fed rate monitor tool, nearly 63% of traders expect the Fed to hike interest rates in June, compared to 33.7% the previous week.