- AUD/USD moves to 2-month high as US dollar falls after NFP.
- Market sentiment has firmly reversed risk as investors no longer fear more Fed rate hikes.
- RBA due next week, markets expect another 25 basis points.
AUD/USD is entering a nine-week high bid above the 0.6500 handle as the Aussie (AUD) benefits from a weaker US Dollar (USD) following a mixed reading on non-farm payrolls and risk. market sentiment sending the Aussie into its sixth green candle in the last seven consecutive trading days.
Global markets turned the US dollar upside down and dumped it safe haven assets and move into riskier assets after worse than expected NFP a reading that saw the U.S. add just a paltry 150,000 jobs in October, below the forecast of 180,000 gains and a drop from September’s 297,000 print (revised down from 336,000) to the indicator’s worst reading since February 2021.
US data down = risk appetite
Cooler US data helps confirm that the Federal Reserve (Fed) is done raising rates, and investors are now turning ahead to begin anticipating a future cycle of rate cuts from the US central bank. Markets are hoping for an easing of monetary policy view to make lending and borrowing cheaper again, negative economic data as the US will remain bullish on the market as recessionary factors weigh on the market Fed to cut rates sooner rather than later.
Next week, the Reserve Bank of Australia (RBA) is set to publish its final rate call on Tuesday, with markets expecting the RBA to hike by 25 basis points as inflation continues to simmer on the fringes of the Australian economy.
AUD/USD Technical Outlook
The Aussie’s technical recovery from the October lows near the 0.6300 level means that AUD/USD is halfway up towards the 200-day simple moving average (SMA), which is currently down at 0.6625.
with AUD/USD after a clean cut of the 50-day SMA near 0.6400, the pair is set to top on Friday near 0.6515.
