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Australian Dollar declines on Friday despite hawkish RBA

The AUD/USD declined by 0.85% in Friday's session, now hovering near the 0.6700 level following the release of the US Nonfarm Payrolls (NFP) report for August. However, the hawkish stance of the Reserve Bank of Australia (RBA), suggests that no imminent rate cuts are likely, which might limit the downside to the Australian Dollar. The economic prospects for Australia are uncertain, and the Reserve Bank of Australia's aggressive stance to combat rising inflation has led to market expectations of only a 0.25% interest rate cut in 2024. Daily digest market movers: Australian Dollar declines against US Dollar after mixed US job data US NFP report shows weaker-than-expected job growth, with 142K fresh payrolls against expectations of 160K. Unemployment Rate fell to 4.2% as anticipated, from the prior 4.3%. Following the data, the likelihood of the Fed starting interest rate cuts this month remained steady, with a 45% chance of a 50 bps reduction to 4.75%-5.00%. On the other hand, RBA Governor Bullock's hawkish stance reinforces the belief that interest rates will remain unchanged in the short term. Withhile monetary policy divergences between the Fed and RBA becoming ever clearer, the downside for the Aussie is limited. AUD/USD technical outlook: Bearish momentum tests support at 0.6650 The pair has been in a downtrend since early September and is now testing the key support level of 0.6670. A break below this level could lead to further losses in the coming days. The Relative Strength Index (RSI) is currently in the negative area and is sloping sharply downward, indicating that the bears are in control of the market. The Moving Average Convergence Divergence (MACD) is also bearish, which confirms mounting selling pressure.

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Publication date:

2024-09-06 19:00:29 (GMT)

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