In today’s European trading session, the AUD/USD pair is edging lower towards 0.6735, marking a 0.10% decline for the day. Despite the Reserve Bank of Australia’s (RBA) hawkish comments, the Australian Dollar struggles to gain traction amidst a cautious market sentiment. All eyes are now on the upcoming US Non-Farm Payrolls (NFP) report for August, set to be the highlight of today’s trading session.
While the Greenback remains weak, and RBA Governor Michele Bullock’s remarks hint at a stable economic outlook, investors are anticipating a dovish stance from the US Federal Reserve in its upcoming meeting. The market is pricing in a 59% chance of a 25 bps rate cut in September, with a 41% possibility of a 50 bps cut.
Thursday’s disappointing ADP Employment Change data added pressure on the USD, with private sector employment rising by only 99,000 in August, falling below expectations. This data, coupled with the upcoming NFP report, will provide insights into the Fed’s future rate decisions.
Investors are closely monitoring the US employment data, expecting an increase of 160,000 jobs in August and a drop in the Unemployment Rate to 4.2%. A weaker-than-expected report could prompt a 50 bps rate cut by the Fed, impacting the USD’s performance against the AUD.
Australian Dollar FAQs
- Interest rates set by the RBA
- Health of the Chinese economy
- Price of Iron Ore
- Trade Balance
Understanding these key factors can help traders navigate the AUD/USD pair more effectively and make informed decisions based on economic indicators and market sentiment.