AUD/USD scales to 0.6640 on upbeat Australian Employment

The AUD/USD pair has extended its recovery to near 0.6640 as the Australian Bureau of Statistics has reported upbeat Employment data. The Australian economy added fresh 64.6K payrolls in February higher than the consensus of 48.5K. In January, the Australian economy reported 11.5K lay-offs. The Unemployment Rate has been trimmed further to 3.5% from the estimates of 3.6% and the prior release of 3.7%.

An upbeat Australian labor market data is going to add to troubles for the Reserve Bank of Australia (RBA), which is designing the roadmap for bringing inflation down. RBA Governor Philip Lowe might continue to target more rates as a higher labor force in action would result in spiking inflationary pressures further.

Earlier, Australian Consumer Inflation Expectations (Mar) data that demonstrate inflation projections for the next 12 months dropped to 5.0% from the consensus of 5.4% and the former release of 5.1%.

Meanwhile, S&P500 futures are showing minimal gains in the Asian session, which could be considered as a dead cat bounce after turmoil on Wednesday. The debacle of Credit Suisse after the Silicon Valley Bank (SVB) collapse has deepened the risk of global banking turmoil. One school of thought believes that the rationale behind global banking system failure is the fastest and steepest interest rate hikes by the Federal Reserve (Fed) and other western central banks.

The US Dollar Index (DXY) is looking to extend its correction below 104.60 as investors are expecting a less-hawkish interest rate decision by the Federal Reserve (Fed), scheduled for next week. After a one-time blip in the United States inflation in January, the US inflation has re-routed south, which has faded the expectations of a severe hawkish stance from Fed chair Jerome Powell.