Australian Dollar holds positive ground due to correction in US Dollar, employment data eyed

Australian Dollar struggles to recover from the recent losses.
RBA’s decision to keep policy rates unchanged might exert pressure on the Aussie Dollar.
Higher US Treasury yields bolster the Greenback, coupled with upbeat US employment data.

Akhtar Faruqui FXStreet

The Australian Dollar (AUD) treads waters to halt a two-day losing streak on Wednesday. However, the AUD/USD pair is under pressure due to risk-off sentiment and stronger US Dollar (USD). Additionally, the pair weakened after the interest rate decision by the Reserve Bank of Australia (RBA) on Tuesday.

Australia's central bank opted to maintain the status quo, leaving the current interest rate unchanged at 4.10% in the recent policy meeting. This decision might exert pressure on the Aussie pair. Nevertheless, there is a possibility of a rate hike, with expectations pointing toward a peak of 4.35% by the end of the year. This projection aligns with the persistent elevation of inflation above the target.

The US Dollar Index (DXY) climbed to an 11-month high on the back of the upbeat US employment data and higher US Treasury yields. US JOLTS Job Openings exceeded expectations, leading to an increase in US yields. The 10-year US Treasury yield reached its highest since 2007.

Additionally, market caution regarding the US Federal Reserve's (Fed) interest rate trajectory is contributing to the positive sentiment surrounding the Greenback.

Daily Digest Market Movers: Australian Dollar weakens due to stronger US Dollar, market caution

RBA chose to maintain the Official Cash Rate (OCR) at 4.10%, aligning with widespread expectations, which might exert pressure on the Aussie Dollar.
Michele Bullock, the newly appointed governor of the RBA, emphasized in her inaugural monetary policy statement that there might be a need for additional tightening of monetary policy.
Bullock mentioned that recent data align with the return of inflation to the target range. While inflation in Australia has peaked, it remains elevated and is expected to persist for a while.
The 10-year US Treasury yield reached 4.85% on Wednesday, the highest level since 2007.
US JOLTS Job Openings improved to 9.61M in August from the previous reading of 8.92M. The market was expecting a decline to 8.80M figures.
Cleveland Federal Reserve President Loretta Mester stated on Tuesday that she is likely to favor an interest rate hike at the next meeting if the current economic situation holds.
Atlanta Fed President Raphael Bostic shared his perspective on the Federal Reserve's policy outlook, stating, "I am not in a hurry to raise, not in a hurry to reduce either." He emphasized a patient approach, indicating that there is no urgency for further actions at the moment.
Traders await the US employment data, with the release of the ADP and ISM reports on Wednesday and the Nonfarm Payrolls on Friday. Australia’s Trade Balance will also be eyed on Thursday.

Technical Analysis: Australian Dollar hovers around 0.6300, November's low emerges as support

Australian Dollar trades around 0.6320 on Wednesday. The major level at 0.6300 emerges as the immediate support, followed by November's low at 0.6272. On the upside, the 21-day Exponential Moving Average (EMA) at 0.6402 appears to be a key barrier, following the 23.6% Fibonacci retracement at 0.6464 level.

AUD/USD: Daily Chart

Economic Indicator

Australia Trade Balance (MoM)

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

EUR/USD risks a deeper drop below 1.1750

EUR/USD keeps its vacillating mood in place as the the NA session drwas to a close on Tuesday, hovering below the 1.1800 hurdle amid acceptable gains in the US Dollar. In the meantime, market participants and the FX galaxy are expected to closely follow President Trump’s SOTU speech around 2AM GMT.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.