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Australian Dollar trades broadly higher today, lifted partly by resurgence in risk sentiment, as well as robust PMI data reflecting the cyclical recovery in Australian economy. Improvement in the economic outlook reduces the immediate need of a rate cut by RBA. Judo Bank, who complied the PMI data, warned about the possibility for another rate hike if economic activity continues to pick up while inflation remains elevated.

The US Dollar strengthened at the beginning of the week but could not maintain its momentum and turned lower, helping EUR/USD recover from an over one-month low of 1.0724.

Dollar was sold off overnight after weaker than expected ISM Services data, and the weakness persisted following comments from Fed Chair Jerome Powell. Powell downplayed the significance of recent robust labor and inflation figures, suggesting them as fluctuations in "bumpy road" of moderating demand and inflation. This narrative reinforces the market's anticipation that Fed is still leaning towards three rate cuts this year over just two. Though, the upcoming non-farm payroll data remains crucial for further adjustments in these expectations.

Swiss Franc faced broad selling pressure in European session, driven by CPI lower than CPI data. Inflation in Switzerland slowed to its lowest since September 2021 at 1.0%, and remained within the SNB's target range for the tenth consecutive month. This development sparked speculation among market participants about the possibility of further monetary easing by SNB, with some expecting a rate cut in each of June and September. SNB had already taken a lead among major central banks by cutting its key rate to 1.5% in March, and more could be in the queue.

The EUR/USD pair extends its recovery beyond 1.0850 on Thursday, as market players keep dropping the US Dollar, while the Euro benefited from signs of life in the local economy.