AUD/USD trades sideways above 0.6700 ahead of US data

AUD/USD stays in a tight range above 0.6700 despite multiple tailwinds.
A hawkish guidance from RBA Bullock on interest rates fails to uplift the Australian Dollar (AUD).
Weak US JOLTS Job Openings data weighs heavily on the US Dollar.

Sagar Dua FXStreet

The AUD/USD pair trades in a tight range above the round-level support of 0.6700 in Thursday’s European session. The Aussie asset fails to find bids despite weakness in the US Dollar (USD) and Reserve Bank of Australia (RBA) Governor Michele Bullock’s hawkish guidance on interest rates.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its downside below 101.20. The US Dollar faced selling pressure after the release of weak United States (US) JOLTS Job Openings data for July, which raised red flags to labor market conditions.

Michele Bullock said in his speech at the Anika Foundation in Thursday’s Asian session, "If the economy evolves broadly as anticipated, the board does not expect that it will be in a position to cut rates in the near term.” Her comments strengthened market speculation that the RBA will unlikely cut interest rates this year.

The Aussie asset consolidates as investors look for fresh cues about how much the Federal Reserve (Fed) will cut interest rates in its September meeting.

The Fed is widely anticipated to start reducing interest rates this month as downside risks to the United States (US) labor market have increased and the progress in the disinflation process towards bank’s target of 2% remains intact. For meaningful cues about the likely interest rate cut size, investors await the US Nonfarm Payrolls (NFP) data for August, which will be published on Friday.

In today’s session, investors will focus the US ADP Employment Change and ISM Services PMI for August. Economists estimate that payrolls in the private sector rose by 145K from 122K in July. In the same period, activities in the service sector, which accounts for two-thirds of the economy, are expected to have expanded at a slower pace to 51.1 from the former reading of 51.4.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.