Australian Dollar retreats after upbeat US NFP report boosts the US Dollar
- The US Dollar strengthens after US job creation significantly exceeds expectations.
- The US labor market remains resilient despite slower wage growth.
- The Reserve Bank of Australia's hawkish stance helps limit downside pressure on the Australian Dollar.
AUD/USD trades around 0.7105 at the time of writing on Friday, down 0.39% on the day, as the US Dollar (USD) gains support following a stronger-than-expected US employment report.
The Bureau of Labor Statistics reported that Nonfarm Payrolls (NFP) increased by 172K in May, following an upwardly revised gain of 179K in April. The market had expected only 85K new jobs. Meanwhile, the Unemployment Rate held steady at 4.3%, while annual wage growth, as measured by Average Hourly Earnings, eased to 3.4% from 3.6% previously.
This combination of a resilient labor market and moderating wage pressures supports the US Dollar (USD), as markets adjusted their expectations toward a more hawkish Federal Reserve (Fed) outlook. According to the CME FedWatch tool, traders currently assign a 41.2% chance to a 25-basis-point rate increase in December, while the odds of rates remaining unchanged stand at 41.6%. The US Dollar Index (DXY) advanced in the immediate aftermath of the release and recovered toward 99.55 at the time of press.
In Australia, the domestic backdrop remains mixed. Analysts at BNY note that the Reserve Bank of Australia (RBA) remains concerned about persistent inflationary pressures, driven by tight labor market conditions and energy-related risks. This environment is encouraging the central bank to maintain a restrictive policy stance despite signs of slowing economic growth.
Recent Gross Domestic Product (GDP) figures disappointed investors and triggered a correction in the Australian Dollar (AUD). Nevertheless, RBA Governor Michele Bullock reiterated this week that bringing inflation under control remains the central bank’s top priority, adding that the Board stands ready to take whatever action is necessary to achieve its mandate of price stability and full employment.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.05% | 0.02% | -0.12% | 0.39% | 0.37% | 0.31% | |
| EUR | -0.13% | -0.09% | -0.09% | -0.25% | 0.26% | 0.21% | 0.19% | |
| GBP | -0.05% | 0.09% | -0.02% | -0.18% | 0.34% | 0.31% | 0.27% | |
| JPY | -0.02% | 0.09% | 0.02% | -0.14% | 0.36% | 0.33% | 0.28% | |
| CAD | 0.12% | 0.25% | 0.18% | 0.14% | 0.51% | 0.48% | 0.43% | |
| AUD | -0.39% | -0.26% | -0.34% | -0.36% | -0.51% | -0.02% | -0.10% | |
| NZD | -0.37% | -0.21% | -0.31% | -0.33% | -0.48% | 0.02% | -0.06% | |
| CHF | -0.31% | -0.19% | -0.27% | -0.28% | -0.43% | 0.10% | 0.06% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
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