During Wednesday's trading session, the Australian Dollar depreciated significantly against the US Dollar by 0.68% or 48 pips. Note, that the Aussie depreciated against other major currencies as well.
The drop was driven by the release of the Australian CPI data on Wednesday at 1:30 GMT. The data came out worse-than-expected of 0.0% compared with forecast 0.2%.
The unsatisfactory inflationary data could motivate the Reserve Bank of Australia to cut interest rates. Policymakers are concerned with slower global economic growth and the progress of the US-China trade war.
According to analysts, the Australian Dollar will be observing the forthcoming meeting between the Chinese officials and the US Trade Representative, Robert Lighthizer, as well Treasury Secretary, Steve Mnuchin. While the US-China trade conflict seems to end, the risk of another US-led trade war rises.