AUD/USD revisits 0.6300 support after Australia unveils Labor's first budget

Australian Treasurer Jim Chalmers presented Labor's first budget on Tuesday, with the key forecasts noted below.

Australian govt forecasts CPI at 5.75% in 2022-23.

Govt forecasts CPI to return to RBA band in 2024-25.

Govt Forecasts GDP growth of 3.25% in 2022-2023.

Govt forecasts GDP growth of 1.25% in 2023-2024.

Govt forecasts unemployment at 4.5% in 2023-2024.

Market reaction

AUD/USD broke its consolidative range to the downside on the budget release, now testing 0.6300 once again. The pair is bearing the brunt of risk-off flows seeping back into markets, despite upbeat sentiment data from Germany. Meanwhile, the US dollar is struggling to find demand, exerting additional downside pressure on the aussie.