- AUD/USD moves higher to 0.6750 as US Dollar faces a wrath due to strong speculation for Fed rate-cuts in September.
- Fed Williams communicated the need for more good inflation to gain confidence for Fed rate cuts.
- Aussie Employment data will provide fresh guidance on RBA interest rates.
The AUD/USD pair climbs to near 0.6750 in Wednesday’s European session. The Aussie asset strengthens as the US Dollar (USD) posts a fresh almost four-month low due to firm speculation that the Federal Reserve (Fed) will begin lowering interest rates from the September meeting.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 103.30. According to the CME FedWatch tool, expectations for a rate-cut move in September appear to be certain. The tool also shows that the Fed will cut interest rates twice this year against one signaled by officials in their latest dot plot.
A rate-cut move in September seems as a done deal as the Consumer Price Index (CPI) report for June suggested that the progress in disinflation has resumed after reversing in the first quarter.
Meanwhile, Fed policymakers have also acknowledged that the central bank has made some progress in inflation but reiterated that they want to gain greater confidence before cutting interest rates.
In European trading hours, New York Fed Bank President John Williams commented that the current rate policy is appropriate to bring inflation down to the bank’s target of 2%. However, he expressed the need for more good data to strengthen confidence. When asked about rate cuts, William said, “An interest-rate cut could be warranted in the US in the coming month,” Wall Street Journal reported.
On the Aussie front, investors look for the labor market data for June, which will be published on Thursday. The Employment report is expected to show that employers hired 20K job-seekers, lower than 39.7K onboarded in May. The Unemployment Rate is expected to remain steady at 4.0%. Signs of strong job demand would boost expectations of further policy-tightening by the Reserve Bank of Australia (RBA). Financial markets expect that the RBA would be one of the laggards to join the global rate-cutting cycle.
Economic Indicator
Employment Change s.a.
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.
Read more.Next release: Thu Jul 18, 2024 01:30
Frequency: Monthly
Consensus: 20K
Previous: 39.7K
Source: Australian Bureau of Statistics
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
EUR/USD retreats from multi-month tops, back near 1.1050
Following a move to six-month highs in the 1.1140-1.1150 band, EUR/USD now gives away part of those gains on the back of a mild attempt of recovery in the US Dollar as investors continue to assess President Trump's recent annoucements.
GBP/USD off highs, remains well bid near 1.3100
GBP/USD now partially sets aside its earlier advance in favour of fresh peaks just north of the 1.3200 mark, challenging the 1.3100 neighborhood on the back of a tepid bounce from recent multi-month lows in the Greenback.
Gold reclaims $3,100 following deep correction
Gold staged a sharp rebound after coming within a touching distance of $3,050 on Thursday, extending gains beyond $3,120. Falling US Treasury bond yields and the risk-averse market atmosphere following the "Liberation Day" tariffs seem to be helping XAU/USD find a foothold.
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX
Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
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.