- The AUD/USD pair is falling and struggling to strengthen against the USD.
- US nonfarm payroll data disappoints: 142,000 fresh jobs added, below estimates of 160,000
- The RBA’s hawkish stance does not indicate any imminent rate cuts, which could support the AUD.
The AUD/USD rate fell 0.85% in Friday’s session, currently hovering near the 0.6700 level following the release of the US Nonfarm Payrolls (NFP) report for August. However, the Reserve Bank of Australia’s (RBA) hawkish stance suggests there is no chance of any rate cuts imminent, which could limit the Australian dollar’s ​​decline.
Australia’s economic outlook remains uncertain, with the Reserve Bank of Australia’s aggressive stance to combat rising inflation leaving market expectations for an interest rate cut in 2024 at just 0.25%.
Daily Market Factors Review: Australian dollar falls against US dollar after mixed US jobs data
- The American NFP report indicates weaker than expected employment growth – the number of fresh positions amounted to 142 thousand, compared to expectations of 160 thousand.
- The unemployment rate fell to 4.2%, as expected, from the previous level of 4.3%.
- Following the data release, the probability that the Fed will begin cutting interest rates this month remained stable, with a 45% chance of a 50 basis point cut to 4.75%-5.00%.
- On the other hand, RBA Governor Bullock’s hawkish stance reinforces the belief that interest rates will remain unchanged in the brief term.
- While policy divergence between the Fed and the RBA is becoming increasingly apparent, the downside potential for the Australian dollar is confined.
AUD/USD Technical Outlook: Bearish momentum tests support at 0.6650
The pair has been in a downtrend since early September and is currently testing the key support level of 0.6670. A breakout of this level could lead to further losses in the coming days.
The Relative Strength Index (RSI) is currently in negative territory and falling sharply, indicating that bears are in control of the market. The Moving Average Convergence Divergence (MACD) indicator is also bearish, confirming increasing selling pressure.
