The AUD/USD pair is weakening near 0.6580 in early Asian trading on Friday. Strong US employment data has caused traders to delay expectations of Fed rate cuts. The Reserve Bank of Australia’s hawkish stance may help support the Australian dollar and limit downside for the pair.
The US Dollar is gaining strength after better-than-expected US Nonfarm Payrolls data was released, putting pressure on the AUD/USD pair. This week, the focus will be on the US Consumer Price Index for May and the Federal Reserve Interest Rate Decision, which could lead to market volatility.
The US economy added more jobs than anticipated in May, reducing the likelihood of Fed rate cuts in September. The NFP increased by 272,000 in May, surpassing the forecast of 185,000. Unemployment rose to 4.0% in May, and wage inflation also saw an increase.
The strong US employment data may support economic growth and delay any potential Fed rate cuts, which could benefit the US Dollar and pose a challenge for the AUD/USD pair. However, the RBA’s stance on interest rates could provide some support for the Australian dollar. RBA Governor Michele Bullock stated that rate cuts are not expected this year and that the bank is willing to raise rates if inflation does not reach the target range.