AUD/USD remains under pressure below 0.6600 on renewed US Dollar demand

The AUD/USD pair remains under some selling pressure around 0.6580 during the early Asian session on Monday. The renewed US Dollar (USD) demand after stronger-than-expected US Nonfarm Payrolls (NFP) data drags the pair lower. The US Consumer Price Index (CPI) for May and the Federal Reserve (Fed) Interest Rate Decision will take center stage this week and might trigger volatility in the market. 

The Labor Department showed on Friday that the US economy created far more jobs than expected in May, which dampened the expectation that the US Fed will start cutting interest rates in September. The NFP in the United States climbed 272,000 in May from a 165,000 increase (revised from 175,000) in April and came in above the forecast of 185,000. Additionally. The unemployment Rate ticked up to 4.0% in May from 3.9% in April. The wage inflation, as measured by the Average Hourly Earnings, rose 4.1% YoY in May from 4.0% (revised from 3.9%) in April, above the market consensus of 3.9%. 

The strong US employment data might support economic growth and make it less likely that the Fed will lower its borrowing costs anytime soon. This, in turn, might boost the Greenback in the near term and create a headwind for AUD/USD. 

On the Aussie front, the hawkish stance from the Reserve Bank of Australia (RBA) might limit the downside for the pair. Last week, RBA Governor Michele Bullock said that the central bank is not expected to deliver rate cuts this year, adding that it is prepared to increase interest rates further if inflation doesn’t return to the target range of 1%–3%.