Emmanuel OchayiThe AUD/USD pair is grappling with renewed selling pressure following robust US job data.
The US economy added 353,000 jobs in January, surpassing expectations and prompting a surge in the US Dollar.
Join our WhatsApp ChannelAs a result, the AUD/USD pair touched fresh yearly lows of 0.6502, with investors closely eyeing China’s Caixin Services PMI for further cues.
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The buoyant job figures have reshaped market sentiment, leading to a reassessment of the Federal Reserve’s stance.
The likelihood of a rate cut in May, once fully priced, now stands at 85%, causing a ripple effect on the overall 2024 rate-cut forecasts. This unexpected shift bolsters the Greenback, acting as a formidable headwind for the struggling AUD/USD pair.
On the domestic front, Australia’s economic pulse shows mixed signals. The Composite Purchasing Managers Index (PMI) and Services PMI witnessed improvements, offering a glimmer of hope.
However, the Reserve Bank of Australia (RBA) is poised to keep its Cash Rate Target steady at 4.35%, with RBA Governor Bullock set to address the decision’s implications and the monetary policy outlook.
As traders brace for the week ahead, the focus intensifies on key events, including the Australian Trade Balance, Chinese Caixin Services PMI, and US ISM Services PMI data. The market anticipates cues from these factors, while the RBA’s impending interest rate decision on Tuesday could dictate the AUD/USD pair’s trajectory.
Amidst this dynamic landscape, caution is advised, and investors are reminded of the inherent risks in the ever-fluctuating foreign exchange markets.
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