AUD/USD finds cushion near 0.6630 as US Dollar retreats after weekly US jobless data

The AUD/USD pair rebounds from 0.6630 in Thursday’s New York session. The Aussie asset recovers as US Dollar (USD) falls back after higher-than-expected weekly United States (US) Initial Jobless Claims for the week ending May 31. Number of individuals claiming jobless benefits for the first time were 229K, higher than estimates of 220K and the prior release of 221K, upwardly revised from 219K.

This adds to doubts that the US labor market is losing strength. This week, JOLTS Job Openings data for April and ADP Employment Change for May missed estimates and deepened fears of normalizing labor market conditions.

Easing US labor market strength have prompted Federal Reserve (Fed) rate-cut bets for the September meeting. The CME FedWatch tool showed that 30-day Fed fund futures pricing in a 68% chance for rate cuts in September, up from 50% recorded a week ago.

Meanwhile, the US Dollar Inde (DXY) has dropped to 104.00. Going forward, the investors will focus on the United States Nonfarm Payrolls (NFP) data for May, which will be published on Friday. According to the estimates, US employers added fresh 185K payrolls, which were lower than the former release of 175K. The Unemployment Rate is estimated to have remained steady at 3.9%.

The Australian Dollar finds bids as Reserve Bank of Australia (RBA) Governor Michele Bullock delivered a hawkish guidance on the interest rate outlook on Wednesday. Bullock indicated that the central bank is prepared to increase interest rates further if inflation doesn’t return to the target range of 1%-3%.

However, slower Australian Q1 Gross Domestic Product (GDP) has raised doubts over its economic outlook. The Australian economy grew meagrely by 0.1%, slower than expectations of 0.2% and the former reading of 0.3%.