AUD/USD strives to hold 0.6430, investors shift focus to US NFP

• AUD/USD finds temporary support near 0.6430, while the outlook remains uncertain.
• Aussie Retail Sales grew at a faster pace of 1.2% in June.
• Fed’s Powell signaled that there is no rush for interest rate cuts.

The AUD/USD pair attempts to hold the immediate support level of 0.6430 during the European trading session on Thursday. The Aussie pair attracts slight bids on upbeat Australian Retail Sales data for June, released earlier in the day.

Australian Bureau of Statistics reported that Retail Sales, a key measure of consumer spending, rose at a faster pace of 1.2% on month, compared to expectations of 0.4% and the prior reading of 0.5%. In the second quarter, the consumer spending measure grew by 0.3%, faster than the former release of 0.1%.

However, better-than-projected Retail Sales data is unlikely to force traders to pare supporting interest rate cuts by the Reserve Bank of Australia (RBA) in the policy meeting in August. Traders are increasingly confident that the RBA will cut borrowing rates next month as inflationary pressures have cooled down significantly. The data on Wednesday showed that the Australian Consumer Price Index (CPI) rose moderately by 0.7% in the second quarter of the year.

Meanwhile, sheer strength in the US Dollar will keep the Aussie pair on the tenterhooks. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds onto gains near a fresh two-month high around 100.00.

The US Dollar strengthens as traders pare Federal Reserve (Fed) dovish bets for the September meeting after Chairman Jerome Powell signaled that there is no rush for interest rate cuts.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for July, which is scheduled to be released on Friday. The NFP report is expected to show that employers added 110K, lower than 147K in June.