Australian Dollar comes under pressure as US Dollar snaps two-day decline
- AUD/USD edges lower as the US Dollar steadies following two consecutive days of losses.
- Markets trim Fed rate-hike bets as lower energy prices ease inflation concerns.
- China’s trade figures could influence the Australian Dollar ahead of next week’s RBA meeting.
AUD/USD edges lower on Thursday as the US Dollar (USD) steadies following two consecutive days of losses. At the time of writing, the pair trades around 0.7036, down roughly 0.32% on the day.
US labour-market data released on Thursday offered some support to the Greenback. Initial Jobless Claims rose only slightly to 199K from 198K and came in below expectations of 202K.
Meanwhile, attention stays on developments surrounding the Strait of Hormuz. Iran and Oman are close to finalizing an agreement that would establish a temporary shipping route through the waterway. The prospect of an agreement has improved near-term market sentiment, but the broader backdrop remains fragile, keeping some defensive demand for the US Dollar alive.
Tehran denies holding direct talks with the United States, even as Washington says negotiations are taking place. Traders are also waiting for formal confirmation of the Iran-Oman agreement and more details on whether it would lead to a full reopening of the Strait.
Oil prices trade modestly higher on Thursday, although their recent decline has eased energy-driven inflation concerns and reduced pressure on major central banks to raise interest rates. According to the CME FedWatch Tool, markets now see around a 56% chance of a September Federal Reserve (Fed) rate hike, down from 63% a week earlier.
Friday’s US Nonfarm Payrolls (NFP) report will be closely watched as it could influence Fed rate expectations.
On the Australian side, China’s Trade Balance data is also in focus. The Australian Dollar is sensitive to developments in the Chinese economy because of the close trading relationship between the two countries.
Attention will then shift to the Reserve Bank of Australia’s (RBA) interest-rate decision next week. Analysts at Standard Chartered expect the Reserve Bank of Australia to "keep the cash rate unchanged at 4.35% at its 11 August meeting," noting that "Q2 trimmed mean inflation held steady at 0.8% q/q – as we had expected – and below the RBA’s prior forecast (0.9%)." They add that this outcome, "together with the recent retracement in oil prices, should take the pressure off the RBA to tighten policy further in the near term."
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | -0.07% | 0.05% | 0.03% | 0.25% | 0.10% | 0.23% | |
| EUR | -0.09% | -0.16% | -0.02% | -0.06% | 0.14% | 0.03% | 0.14% | |
| GBP | 0.07% | 0.16% | 0.13% | 0.10% | 0.30% | 0.17% | 0.31% | |
| JPY | -0.05% | 0.02% | -0.13% | -0.03% | 0.18% | 0.05% | 0.19% | |
| CAD | -0.03% | 0.06% | -0.10% | 0.03% | 0.21% | 0.09% | 0.22% | |
| AUD | -0.25% | -0.14% | -0.30% | -0.18% | -0.21% | -0.11% | -0.01% | |
| NZD | -0.10% | -0.03% | -0.17% | -0.05% | -0.09% | 0.11% | 0.16% | |
| CHF | -0.23% | -0.14% | -0.31% | -0.19% | -0.22% | 0.00% | -0.16% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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