- AUD/USD is expected to display more weakness despite soaring odds for hawkish RBA.
- The DXY is displaying a lackluster performance ahead of the US NFP.
- As per consensus, the US NFP will decline to 300k vs. 528k reported earlier.
The AUD/USD pair has sensed barricades around the immediate hurdle of 0.6800 in the Asian session. Earlier, the asset displayed a feeble pullback after printing a fresh six-week low at 0.6771 on Thursday. The less-confident pullback is expected to turn into fresh mayhem after a hiatus as the US dollar index (DXY) is broadly strong.
The aussie bulls have failed to find traction despite the soaring bets over the ‘hawkish’ stance by the Reserve Bank of Australia (RBA). Next week, the RBA will announce the monetary policy, and a restrictive measure is highly expected. As price pressures in the Australian economy have not displayed any sign of exhaustion yet, RBA Governor Philip Lowe will keep up the pace of hiking interest rates.
Currently, the RBA’s Official Cash Rate (OCR) stands at 1.85% after three consecutive 50 basis points (bps) interest rate hikes. RBA policymakers are expected to advocate one more 50 bps rate hike. An occurrence of the same will elevate the OCR to 2.35%.
Meanwhile, the DXY has turned sideways after a minor correction from a fresh two-decade high at 109.98. The DXY slipped after remaining a little short of the psychological resistance of 110.00. Investors have shifted to the sidelines ahead of the US Nonfarm Payrolls (NFP) data. The economic data is expected to land at 300k, lower than the prior release of 528k. As US corporate preferred to slow down the recruitments due to lower demand forecasts after the second quarter earnings season, a dismal employment generation is highly expected.
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