AUD/USD breaks confidently towards 0.6600 amid mixed US NFP report
- AUD/USD breaks sharply around 0.6600 as the US NFP report remains mixed.
- Fresh payrolls in July were lower at 187K, than expectations of 200K but marginally higher than June’s reading of 185K.
- The catalyst that could force the Fed to remain hawkish ahead is the stubborn Average Hourly Earnings data.
The AUD/USD pair recovers swiftly and approaches the round-level resistance of 0.6600 as the United States labor market report for July remained mixed. US Nonfarm Payrolls (NFP) report shows that the labor market got fat with fresh employment of 187K, lower than expectations of 200K but marginally higher than June’s reading of 185K.
The Unemployment Rate for July dropped to 3.5% against the estimates and the former release of 3.6%. The catalyst that could force the Federal Reserve (Fed) to remain hawkish ahead is the stubborn Average Hourly Earnings data. The monthly labor cost index maintained the pace of 0.4% as recorded in June while investors anticipated a decline in the economic data to 0.3%. Like the monthly data, annualized labor cost index also remained stable at 4.4% against expectations of 4.2%.
Sticky labor cost data could keep inflationary pressures intact as higher disposable income with households would keep consumer spending momentum intact.
The US Dollar Index (DXY) tumbles marginally below the crucial support of 102.00 as the resilient payroll indicator loses significant heat. Also, yields offered on 10-year US Treasury bonds dropped sharply below 4.14%.
The Australian Dollar has broadly underperformed against other currencies as the Reserve Bank of Australia (RBA) kept interest rates unchanged this week. RBA Governor Philip Lowe remained confident that inflation will return to the desired rate by the end of 2025. RBA policymakers remained worried about China’s economic prospects, believing that export prices could fall ahead.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
