AUD/USD surrenders gains as USD Index rebounds despite downbeat US NFP report
|- AUD/USD has capitulated gains generated after the release of weaker-than-expected US NFP data.
- S&P500 is expected to open on a subdued note as investors are cautious ahead of second-quarter result season.
- The Australian Dollar could show a decent bounce back as investors are hoping for an interest rate hike by the RBA in August.
The AUD/USD pair has surrendered gains generated after the release of the bleak United States Nonfarm Payrolls (NFP) report. The Aussie asset has dropped to near 0.6620 after retreating from 0.6660 as the US Dollar Index (DXY) has found immediate support near 102.60.
S&P500 is expected to open on a subdued note as investors are cautious ahead of second-quarter result season. Aggressively restrictive monetary policy by the Federal Reserve (Fed) and tight credit conditions might have impacted the profitability of corporate.
The USD Index is expected to remain heavily volatile as investors would start assessing the impact of the NFP data on the Federal Reserve’s (Fed) interest rate outlook. As per the US NFP report, the labor market was flooded with fresh additions of 209K payrolls against the consensus of 225K and the former release of 306K.
The Unemployment Rate has dropped to 3.6% as expected by the market participants. Apart from the Employment numbers, the economic catalyst that is under observation is the Average Hourly Earnings data. Monthly economic data maintained a pace of 0.4% and remained higher than the consensus of 0.3%. Also, Annualized Average Hourly Earnings remained at a steady pace of 4.4%.
Meanwhile, the Australian Dollar could show a decent bounce back as investors are hoping for an interest rate hike in August. A poll from Reuters showed that the RBA could push interest rates to 4.35%, Monthly Consumer Price Index (CPI) has softened to 5.6% but is still far from the desired rate of 6.8%.
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