AUD/USD trades with mild gains above 0.6650, all eyes on US NFP data
|- AUD/USD posts modest gains around 0.6670 in Friday’s early Asian session.
- The softer US employment data this week triggered the Fed rate cut expectation in September.
- RBA’s Bullock said the central bank won’t hesitate to hike again if inflation remains sticky.
The AUD/USD pair trades with mild gains near 0.6670 on Friday during the early Asian trading hours. The growing speculation about the US Federal Reserve (Fed) rate cut and softer US economic data weigh on the US Dollar (USD) and create a tailwind for AUD/USD. Later on Friday, the US Nonfarm Payrolls (NFP) data for May will be in the spotlight.
The softer US economic data this week spurred the Fed rate cut expectation in September. Traders are now pricing in a nearly 68% odds chance of a rate cut for the September meeting, up from 50% at the beginning of the week, according to the CME FedWatch tool.
The number of Americans claiming jobless benefits for the week ended May 31 rose 8,000 to 229,000 from 221,000 in the previous week, higher than the forecast of 220K, according to the Labour Department on Thursday. Earlier this week, the US Manufacturing PMI came in weaker than the expectation, dropping to 48.7 in May from 49.2 in April.
On the other hand, the hawkish tone from Reserve Bank of Australia (RBA) Governor Michele Bullock on Wednesday has provided some support to the Australian Dollar (AUD). RBA’s Bullock said the central bank Plan A is to remain "data-driven," indicating the RBA will maintain its neutral stance for the time being. However, stickier than expected inflation would prompt the central bank to raise interest rates again.
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