AUD/USD retreats to 0.6660 as investors turn cautious ahead of US NFP

FXStreet
Updated Jun 7, 2024 13:03
Mitrade
coverImg
Source: DepositPhotos

■AUD/USD drops to near 0.6660 as investors are expected to make informed positions after the US NFP report for May.

■The Fed is expected to start reducing interest rates from September.

■Investors see the RBA holding interest rates steady by the year-end.


The AUD/USD pair falls back to 0.6660 while attempting to capture the round-level resistance of 0.6700 in Friday’s London session. The Aussie asset faces pressure as uncertainty ahead of the release of the United States Nonfarm Payrolls (NFP) report for May limits the upside in risk-perceived assets.


The market sentiment turns cautious as the US NFP report is expected to influence market expectations for the Federal Reserve (Fed) rate cuts. S&P 500 futures have turned negative after erasing entire overnight gains, indicating a decline in investors’ risk-appetite. The US Dollar Index (DXY) remains sideways near the crucial support of 104.00.


The US Employment report is expected to show that employers added 185K payrolls, higher than the prior release of 175K. The Unemployment Rate is estimated to have remained steady at 3.9%. Investors will also pay attention to the Average Hourly Earnings data, which gauges wage growth momentum. Annual Average Hourly Earnings are forecasted to have grown steadily by 3.9%. While monthly wage growth is estimated to have risen at a higher pace of 0.3% from the former release of 0.2%.


Upbeat payrolls and wage growth data would diminish hopes of the Fed lowering its interest rates from the current levels. The CME FedWatch tool shows that the Fed would choose the September meeting as the earliest point to start unwinding the restrictive interest rate stance. While soft figures would boost Fed rate-cut expectations for September.


Meanwhile, the Australian Dollar holds gains as the Reserve Bank of Australia (RBA) appears to list as those central banks that are not expected to deliver rate cuts this year. The expectations for RBA rate cuts waned after RBA Governor Michele Bullock delivered hawkish guidance on the interest rate outlook on Wednesday. Bullock indicated that the central bank is prepared to increase interest rates further if inflation doesn’t return to the target range of 1%-3%. Apart from the RBA, the Reserve Bank of New Zealand (RBNZ) is also expected to consider rolling back its tight interest-rate stance next year.


AUD/USD

Overview
Today last price 0.6658
Today Daily Change -0.0009
Today Daily Change % -0.13
Today daily open 0.6667
 
Trends
Daily SMA20 0.6647
Daily SMA50 0.6574
Daily SMA100 0.6562
Daily SMA200 0.654
 
Levels
Previous Daily High 0.6684
Previous Daily Low 0.6634
Previous Weekly High 0.668
Previous Weekly Low 0.6591
Previous Monthly High 0.6714
Previous Monthly Low 0.6465
Daily Fibonacci 38.2% 0.6664
Daily Fibonacci 61.8% 0.6653
Daily Pivot Point S1 0.6639
Daily Pivot Point S2 0.6611
Daily Pivot Point S3 0.6589
Daily Pivot Point R1 0.6689
Daily Pivot Point R2 0.6711
Daily Pivot Point R3 0.6739

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Do you find this article useful?
Related Articles
placeholder
Japanese Yen experiences volatility due to more FX intervention risksThe Japanese Yen (JPY) trims its gains as the US Dollar (USD) strengthens, buoyed by improved Treasury yields. However, the JPY's volatility is anticipated to persist amid speculation of intervention by Japanese authorities following weaker-than-anticipated US Consumer Price Index (CPI) figures.
Author  FXStreet
The Japanese Yen (JPY) trims its gains as the US Dollar (USD) strengthens, buoyed by improved Treasury yields. However, the JPY's volatility is anticipated to persist amid speculation of intervention by Japanese authorities following weaker-than-anticipated US Consumer Price Index (CPI) figures.
placeholder
EUR/USD trims gains and snaps seven-day win streak ahead of Fed policy updateEUR/USD stumbled on Monday after a muddled election outcome in France leaves policy guidance unclear for the Euro bloc.
Author  FXStreet
EUR/USD stumbled on Monday after a muddled election outcome in France leaves policy guidance unclear for the Euro bloc.
placeholder
EUR/USD Price Analysis: Holds position around 1.0850 due to bullish biasEUR/USD halts its seven-day winning streak, trading around 1.0830 during the Asian hours on Monday. The renewed demand for the US Dollar (USD) puts pressure on the EUR/USD pair.
Author  FXStreet
EUR/USD halts its seven-day winning streak, trading around 1.0830 during the Asian hours on Monday. The renewed demand for the US Dollar (USD) puts pressure on the EUR/USD pair.
placeholder
EUR/USD holds position around 1.0800 as softer US data escalate odds of Fed rate cutsEUR/USD continues its winning streak, trading around 1.0790 during the Asian session on Thursday.
Author  FXStreet
EUR/USD continues its winning streak, trading around 1.0790 during the Asian session on Thursday.
placeholder
Japanese yen fragile as USDJPY nears 162; intervention in focusInvesting.com-- The Japanese yen steadied near its weakest levels in 38 years on Thursday, with the currency’s latest decline and low liquidity during a U.S. market holiday sparking fresh speculation over government intervention.
Author  Investing.com
Investing.com-- The Japanese yen steadied near its weakest levels in 38 years on Thursday, with the currency’s latest decline and low liquidity during a U.S. market holiday sparking fresh speculation over government intervention.