- The Australian Dollar offers gains as investors adopt caution before the release of the US NFP on Friday.
- The Australian Bureau of Statistics reported a Trade Balance figure of 6,548 million MoM in May, surpassing the expected 5,500 million.
- The US Dollar may struggle as Wednesday's mixed data fuel rate cut speculations by the Fed.
The Australian Dollar (AUD) retraces its daily gains on Thursday. This could be possibly attributed to traders adopting a cautious stance ahead of the release of US employment data releases on Friday, including the Average Hourly Earnings and Nonfarm Payrolls. The AUD/USD pair was strengthened during the earlier hours after the Trade Balance data release in Australia, which widened to 6,548 ($ 4,321.68) million MoM in May, exceeding the expected 5,500 million and April's balance of 5,024 million. Australia’s Imports plunged by 7.2% MoM in May, swinging from April’s 4.2% increase. Exports shrank 2.5% following the previous decline of 0.6%.
The Australian Dollar could appreciate due to a hawkish statement by Reserve Bank of Australia (RBA) Governor Michele Bullock on Wednesday. Bullock indicated that the central bank is prepared to increase interest rates if the Consumer Price Index (CPI) does not return to the target range of 1%-3%. She also acknowledged that the labor market is easing on several measures, as reported by NCA NewsWire.
The US Dollar (USD) may struggle as mixed economic data from the United States (US), fueling interest rate cut speculation by the US Federal Reserve (Fed). As per the CME FedWatch Tool, the probability of a Fed rate cut by at least 25 basis points has increased to nearly 70.0%, up from 47.5% a week earlier. The depreciation of the US Treasury yields is putting pressure on the Greenback.
Daily Digest Market Movers: Australian Dollar depreciates due to risk aversion
- On Wednesday, the ISM US Services PMI soared to 53.8 in May, marking its highest level in nine months and significantly surpassing the forecast of 50.8. In contrast, the ADP US Employment Change report showed that 152,000 new workers were added to payrolls in May, the lowest in four months and well below the forecast of 175,000 and the downwardly revised figure of 188,000 for April.
- Australia's Gross Domestic Product (GDP) was released on Wednesday, which grew 0.1% in the first quarter, against the expected 0.2% reading. On an annual basis, the economy grew 1.1%, slightly below the expected 1.2%.
- Judo Bank Purchasing Managers Index (PMI) came in at 52.5, lower than the expected reading of 53.1 for May. Meanwhile, Judo Bank Composite PMI recorded a reading of 52.1 in May, a slight decrease from 53.0 in April. This shows that Australia's private sector output continued to grow for the fourth consecutive month, though at a slower rate.
- Caixin China Services PMI came in at 54.0 in May, surpassing expectations of 52.6 and the previous figure of 52.5. This marked the 17th consecutive month of expansion in services activity, indicating the fastest pace since July 2023. Any change in the Chinese economy could impact the Australian market as both countries are close trade partners.
- Last week, Atlanta Fed President Raphael Bostic remarked in an interview with Fox Business that he doesn't believe further rate hikes should be required to reach the Fed's 2% annual inflation target. Additionally, New York Fed President John Williams stated that inflation is still too high but should moderate over the second half of 2024. Williams doesn't feel the urgency to act on monetary policy, per Reuters.
Technical Analysis: Australian Dollar hovers around 0.6650
The Australian Dollar trades around 0.6670 on Thursday. Analysis of the daily chart shows a bullish bias for the AUD/USD pair, as it remains within a rising wedge pattern. This bullish bias is further supported by the 14-day Relative Strength Index (RSI), which is above the 50 level.
Potential upside targets for the AUD/USD pair include the psychological level of 0.6700, the four-month high of 0.6714, and the upper limit of the rising wedge around 0.6750.
On the downside, immediate support is at the 21-day Exponential Moving Average (EMA) at 0.6634, which aligns with the lower boundary of the rising wedge. Additional support is found at the psychological level of 0.6600. A further decline could pressure the AUD/USD pair towards the throwback support region at 0.6470.
AUD/USD: Daily Chart
Australian Dollar price today
The table below shows the percentage change of the Australian Dollar (AUD) against listed major currencies today. The Australian Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.05% | 0.04% | 0.03% | 0.11% | 0.09% | 0.17% | -0.11% | |
| EUR | 0.05% | 0.11% | 0.08% | 0.15% | 0.14% | 0.23% | -0.05% | |
| GBP | -0.04% | -0.08% | -0.03% | 0.06% | 0.06% | 0.14% | -0.15% | |
| CAD | -0.03% | -0.07% | 0.04% | 0.08% | 0.09% | 0.15% | -0.13% | |
| AUD | -0.10% | -0.15% | -0.06% | -0.08% | -0.02% | 0.07% | -0.22% | |
| JPY | -0.10% | -0.12% | -0.06% | -0.07% | -0.01% | 0.07% | -0.21% | |
| NZD | -0.17% | -0.25% | -0.14% | -0.16% | -0.07% | -0.09% | -0.28% | |
| CHF | 0.09% | 0.05% | 0.14% | 0.12% | 0.20% | 0.20% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Next release: Fri Jun 07, 2024 12:30
Frequency: Monthly
Consensus: 185K
Previous: 175K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD continues soft as markets digest employment data
The AUD/USD declined by 0.34% to 0.6470 in Thursday's session, extending its decline to a fresh three-month low of 0.6460. The US Dollar is easing after mixed data, while weak Australian employment data has reduced inflationary concerns, which might change the outlook of the Reserve Bank of Australia.
EUR/USD: Further declines remain well in store
EUR/USD briefly tested fresh year-long lows on Thursday, piercing the 1.0500 handle for the first time in 54 weeks. A lack of meaningful EU data is doing very little to provide support for the Euro, and Fiber bids continue to tilt in favor of the safe haven US Dollar.
Gold falls as Powell signals Fed's patience on lowering rates
Gold recovers some ground on Thursday yet remains trading below its opening price for the fifth consecutive day, undermined by the Greenback’s advance for its own fifth consecutive day. A slightly hot inflation report in the US and solid jobs data sponsored XAU/USD’s leg down toward the 100-day SMA.
Ethereum Price Forecast: ETH could rally to $4,522 despite mixed on-chain flows among investors
Ethereum is down over 1% on Thursday following record net inflows across ETH exchange-traded funds in the past six days. Despite the bullish market outlook, $300 million worth of unstaked ETH could hit the market and cause downward pressure on prices.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.