News report 💱 Forex 🌍 GLOBAL

AUD/USD Slides to 0.6858 as US Jobs Data Fuels 80% Fed Hike Odds

The AUD/USD pair is heading for a weekly loss exceeding 2% as strong US labor data contrasts with a cautious RBA, driving the US Dollar higher and pushing Fed rate hike expectations to 80%.

🕐 1 min read

2 assets impacted (Forex). Net bias: 1 Bullish, 1 Bearish, 0 Neutral. Strongest signal: AUD/USD ↓ 7/10 (85% confidence).

📊 Affected Assets (2)

AUD/USD
Bearish 🤖 85%
📅 Short-term 🌍 AU · Explicit

The pair fell to its lowest level since late March, around 0.6858, heading for a weekly loss of more than 2%. A much stronger US NFP print (165K vs 65K forecast) with unemployment falling to 4.1% pushes December Fed hike odds to 80%, while the RBA paused at 4.85% and dropped its guidance for further hikes, with OCBC expecting the next move to be a cut.

Catalysts
  • ▼ October US NFP rose 165K vs 65K forecast; unemployment fell to 4.1%
  • ▼ Traders price an 80% chance of a December Fed rate hike
Risk Factors
  • ▲ OCBC expects no more RBA hikes and sees the next policy move as a cut, but the RBA remains hawkish on broadly based inflation
  • ▲ The dollar had been under pressure earlier this week after US midterm election results
▼ Show FAQ (2) ▲ Hide FAQ
Why is the Australian dollar falling against the US dollar?

Strong US jobs data (165K new payrolls vs 65K expected) raised bets on another Fed rate hike in December, while the RBA paused after its hike to 4.85% and signalled caution, leaving the rate gap moving in the US dollar's favour.

How far has the pair fallen?

AUD/USD trades around 0.6858, its lowest level since late March, and is heading for a weekly loss of more than 2%.

USD
Bullish 🤖 85%
📅 Short-term 🌍 US ✨ Inferred

October NFP of 165K nearly tripled the 65K forecast, September was revised up to 60K and unemployment fell to 4.1%, giving Fed hawks little reason to back away from further tightening with inflation above the 2% target. Markets now price an 80% chance of a December hike, lifting the Dollar Index to around 102.15 from a five-week low near 101.24.

Catalysts
  • ▲ NFP beat: 165K vs 65K expected; prior month revised up to 60K
  • ▲ Unemployment rate unexpectedly fell to 4.1% from 4.2%
Risk Factors
  • ▼ The dollar had hit a five-week low earlier this week after the US midterm election results
  • ▼ Energy costs pose further inflation upside risks but could also fuel rate-hike fatigue
▼ Show FAQ (2) ▲ Hide FAQ
What did the jobs data mean for the dollar?

Job growth of 165K far exceeded the 65K forecast and unemployment fell to 4.1%, strengthening expectations of an 80% chance of a December Fed rate hike, which supported the dollar.

Where is the Dollar Index trading?

The DXY trades around 102.15 after touching a five-week low near 101.24 earlier in the week.

🎯 Key Takeaways

  • US Nonfarm Payrolls rose by 165,000 in October, far exceeding the 65,000 forecast, while unemployment dipped to 4.1%.
  • Markets now assign an 80% probability to a Federal Reserve rate hike in December.
  • The RBA raised rates to 4.85% but signaled a pause, with analysts at OCBC suggesting the next policy move could be a rate cut.

📝 Executive Summary

The Australian Dollar fell to its lowest level since March, trading near 0.6858 as a robust US Nonfarm Payrolls report bolstered the Greenback. October jobs growth of 165K significantly outperformed expectations, pushing market pricing for a December Federal Reserve rate hike to 80%. Conversely, the Reserve Bank of Australia signaled a potential pause in its tightening cycle, widening the policy divergence between the two central banks.

❓ FAQ

Why is the Australian dollar falling against the US dollar?

Strong US jobs data raised bets on another Fed rate hike in December, while the RBA paused after its hike to 4.85% and signaled caution, leaving the rate gap moving in the US dollar's favour.

What did the jobs data mean for the dollar?

Job growth of 165K far exceeded the 65K forecast and unemployment fell to 4.1%, strengthening expectations of an 80% chance of a December Fed rate hike, which supported the dollar.