Select Page

The Australian dollar is steady on Wednesday. AUD/USD is trading at 0.6743 early in the North American session, up 0.08% on the day.

Australia releases the June employment report early on Thursday. The market estimate stands at 20 thousand, compared to 39.7 thousand in May, which was a three-month high. The labor market has been tight, supporting the case for the Reserve Bank of Australia to avoid lowering interest rates.

Inflation hasn’t fallen as quickly as the RBA had hoped and unexpectedly rose in June from 3.6% to 4%, the highest level this year. The acceleration in inflation has policy makers concerned and the cautious RBA has kept the possibility of a rate hike on the table. The central bank has maintained the cash rate at 4.35% since December 2023 and a rate cut looks unlikely in the near term, barring an unexpected decline in inflation. The markets have priced in a 15% likelihood of a rate cut at the next meeting on August 6, according to the ASX RBA rate tracker.

We’ll hear from a host of Federal Reserve officials during the remainder of the week, and the markets will be hoping for insights about upcoming rate decisions. On Tuesday, Fed Governor Adriana Kugler said she was “cautiously optimistic” that inflation was returning the 2% target, noting that recent inflation readings have been softer than expected and wage growth has eased. Kugler didn’t provide a time line for a rate cut but said it would be appropriate to lower rates “later this year”.

AUD/USD Technical

  • AUD/USD is testing resistance at 0.6738. Above, there is resistance at 0.6761
  • 0.6711 and 0.6688 are the next support levels

marketpulse2024071751

Share it on social networks