-
AUD/USD edges higher to 0.6435 on the softer USD, risk appetite.
-
Reserve Bank of Australia (RBA) is likely to raise the rate by 25 basis points (bps) next week.
-
Market participants will closely focus on US employment data, including Nonfarm Payrolls.
The AUD/USD pair extended its gains during the early European trading hours on Friday. The US dollar and risk appetite supported the pair ahead of Friday’s US nonfarm payrolls data As of press time, the pair is trading near 0.6435, up 0.03% on the day.
Markets expect the Reserve Bank of Australia (RBA) to maintain a hawkish stance and raise the cash rate by 25 basis points (bps) next week. Early on Friday, Australian retail sales for the third quarter (Q3) improved by 0.2% QoQ compared to a 0.6% drop in the previous reading. Meanwhile, the Judo Bank Composite PMI came in at 47.6 in October from the previous reading of 47.3. Services PMI rose to 47.9 in October from 47.6 in September. Upbeat Australian economic data and a risk-on environment boosted the Australian dollar (AUD) against the greenback.
On the other hand, markets are confident that the Federal Reserve (Fed) is nearing the end of its tightening cycle after Fed Chair Jerome Powell made it clear that monetary conditions must remain tight to avoid further rate hikes. The dovish message following the Federal Open Market Committee (FOMC) policy meeting put some pressure on the USD. However, the upward trajectory of US Treasury bonds will likely continue to dominate USD performance in the coming sessions.
Trader will closely watch the highly-anticipated US Nonfarm Payrolls for fresh impetus. The US economy is expected to add 180K jobs in October. The US Unemployment Rate is estimated to remain steady at 3.8%. The stronger-than-expected data might limit the downside of the USD and act as a headwind for the AUD/USD pair. Traders will take cues from the data and find a trading opportunity around the AUD/USD pair.
AUD/USD
