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AUD/USD is down by over two tenths of a percent in the 0.6610s on Wednesday after the release of Australian inflation data overnight weakened the Australian Dollar (AUD). The pair was further undermined by broad based US Dollar (USD) strength, and an over two and a half percent decline in Iron Ore prices, Australia’s premier export. The Australian Monthly Consumer Price Index showed inflation rose 3.4% in February compared to the previous year, missing expectations of 3.5% but equal to the 3.4% reported in January, according to data from the Australian Bureau of Statistics. The lower-than-expected inflation data will have brought forward estimates of when the Reserve Bank of Australia (RBA) will likely cut interest rates. Previous expectations were for a cut in August, according to Reuters. Lower interest rates are negative for currencies as they reduce foreign capital inflows. The US Dollar is up more broadly on Wednesday, however, with the Dollar Index (DXY) which tracks the currency against a trade-weighted basket, up a tenth of percent at the time of publication. There appears to be no clear catalyst for the move higher although Tuesday’s US data was on the whole positive, showing a greater-than-expected rise in Durable Goods Orders in February. This adds to the tally of mostly positive data from the US and gives rate-setters at the Federal Reserve something to consider whether or not to begin cutting interest rates. As things stand, the data seems to be calling for a delay on too hasty cutting which is supporting the Buck. Iron Ore sold off sharply on Wednesday further weighing on the AUD/USD given its importance in Aussie trade. Iron ore was trading at 107.50 a tonne at the time of publication, according to Tradingeconomics. The commodity was pulled down by a combination of continued negative China fundamentals, Australia’s largest export partner, and a fall in demand after restocking, according to Hellenic Shipping News. On a positive note, the Westpac Leading Index in February showed a marginal 0.08% gain after declining 0.09% in the previous month.More By This Author:Canadian Dollar Extends Gains Against A Softer US Dollar In Calm Trading Session Silver Price Analysis: XAG/USD Bears Need To Wait For Break Below 38.2% Fibo. Near $24.30 Gold Price Holds Steady Above $2,170 Level Amid Modest USD Weakness, Geopolitical Risks