- AUD/USD has dropped to near 0.6300 after robust US job data.
- The US laborforce witnessed 336K fresh payrolls, much higher than estimates of 170K.
- Fed Mester was ‘loud and clear’ that the central bank is not done with hiking interest rates.
The AUD/USD pair has faced an intense sell-off to near 0.6300 after the better-than-projected United States Nonfarm Payrolls (NFP) report. The Aussie asset shifted into a bearish trajectory as the market mood has turned cautious as the expectations of one more interest-rate hike from the Federal Reserve (Fed) has accelerated.
The S&P500 opened on a bearish note after the upbeat US job growth in September. The US laborforce witnessed 336K fresh payrolls, much higher than estimates of 170K and the former release of 227K. The jobless rate remains steady at 3.8%, nominally higher than expectations of 3.7%. The monthly wage rate grew by 0.2% but was lower than expectations of 0.3%. The annualized wage rate decelerated to 4.2% vs. the estimates and the former release of 4.3%.
Meanwhile, the US Dollar Index (DXY) jumps to near 106.80 as the odds of one more rate hike from the Fed has increased. As per the CME Fedwatch tool, the chances for interest rates remaining unchanged at 5.25-5.50% have dropped to 70% from 81% after the NFP data release. Also, trades see a 39% chance for Fed increasing rates to 5.50-5.75% by the year-end.
This week, Cleveland Fed Bank President Loretta Mester was ‘loud and clear’ that the Fed is not done with hiking interest rates. Fed Mester said that one more interest rate hike is well-needed this year and they are required to remain high for a longer period. Interest rates should remain high for long enough until the central bank assess the impact of policy-tightening yet done.
On the Aussie front, the Australian Dollar remained under pressure as the Reserve Bank of Australia (RBA) kept the interest rates unchanged at 4.1% as expected by the market participants. The RBA kept monetary policy steady for the fourth time in a row.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds below 0.6400 amid signs of easing US-China tensions
The AUD/USD pair trades in negative territory near 0.6390 during the early Asian session on Monday. The US Dollar edges higher against the Aussie amid signs of easing US-China tensions. China will hold a press conference about policies and measures on stabilizing employment and ensuring stable growth on Monday, which will be closely watched by traders.
USD/JPY holds steady above mid-143.00s amid Trump's uncertainty
USD/JPY kicks off the week on a subdued note and consolidates above mid-143.00s amid mixed cues. Investors push back expectations for an immediate BoJ rate hike amid rising economic risks from US tariffs, which acts as a headwind for the JPY and lends support to the pair amid a modest USD uptick.
Gold edges lower to near $3,300 as US-China trade tensions ease
Gold price loses ground to near $3,310 in Monday’s early Asian session, down 0.30% on the day. De-escalating trade tensions between the US and China underpins the Gold price. The fears of the US recession might help limit the Gold’s losses.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.