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%.
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.
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.
AUD/USD trades around 0.6858, its lowest level since late March, and is heading for a weekly loss of more than 2%.
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.
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.
The DXY trades around 102.15 after touching a five-week low near 101.24 earlier in the week.
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.
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.
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.