The Australian dollar has stabilized on Wednesday after a recent decline, trading at 0.62254, up 0.37% but still near five-month lows. Australian job growth is expected to slow down, with a small gain of 7,200 expected in March following a significant increase of 116,500 in February. The unemployment rate is also expected to rise to 3.9% after dropping to 3.7% in February.
The Reserve Bank of Australia will closely monitor the upcoming March job data, as a slowdown in the labor market could lead to expectations of a rate cut. The RBA has kept the cash rate steady at 1.5% for three consecutive meetings and will convene again on May 7. Key data, including next week’s CPI release for the first quarter, will play a crucial role in the rate decision.
Meanwhile, in the US, the Federal Reserve is facing a strong economy and rising inflation, prompting Fed Chair Powell to hint at delaying rate cuts due to higher than expected inflation reports. This has caused the markets to reduce their expectations for rate cuts, potentially delaying any cuts until 2025.
On the technical side, AUD/USD tested resistance at 0.6437 and has support levels at 0.6413 and 0.6378. The chart shows fluctuations in the AUD/USD exchange rate.
Overall, the Australian dollar is facing challenges amidst uncertainties in the labor market and global economic conditions.