The US Dollar is softening as the Fed's aggressive stance earlier in the week has waned.

The AUD/USD exchange rate is 0.45% higher as it closes in on the New York trade's 0.75 mark. Investors waited for President Joe Biden's announcement of new sanctions against Russia in his visit to Europe to offset the US dollar's initial boost from the aggressive stance of the US Federal Reserve.

The Aussie is benefiting from strong commodity and energy prices. The US president Joe Biden will be visiting Brussels on Wednesday to meet with NATO leaders and other European leaders to push Europe to reduce its dependence on Russian oil, and gas. However, it seems unlikely that the European Union will agree to ban Russian oil.

The release of stronger than anticipated February Australian labour data has added another step to the country's quest for tighter monetary policies. The February unemployment rate fell to 4.0% which is close to 14 years. However, the employment change was twice what the market expected at 77.4K.

Analysts at Rabobank stated that the market is well-positioned for rate hikes by the RBA this fiscal year, suggesting that it might be difficult for the Aussie's to rally on the hawkish comments from their respective central banksers. "But, considering the link between both currencies and commodity exports, we see potential for both currencies to edge a bit higher vs USD through the course of the year," Rabobank analysts stated. The analysts noted, however, that although there are signs that the RBA may tighten its policy, the RBA is still one of the most prudent central banks in the G10.