The AUD/USD pair has risen to near 0.6750 in Wednesday’s European session, with the Australian Dollar strengthening against the US Dollar due to speculation of Fed rate cuts in September. The US Dollar Index has dropped to nearly 103.30, with expectations for a rate cut in September being almost certain. The FedWatch tool also shows that the Fed may cut interest rates twice this year, contrary to officials’ initial projections.
With the Consumer Price Index report for June suggesting progress in disinflation, a rate cut in September seems likely. However, Fed policymakers are cautious and want more data to build confidence before making a decision. New York Fed Bank President John Williams has indicated that an interest rate cut may be warranted in the coming months, depending on the data.
Investors are keenly awaiting the Australian Employment data for June, which is set to be released on Thursday. Expectations are that employers hired 20K job-seekers, lower than the previous month. A strong job market would boost expectations of further policy-tightening by the Reserve Bank of Australia (RBA), which is currently expected to be one of the last central banks to join the global rate-cutting cycle.
One of the key economic indicators to watch is the Employment Change released by the Australian Bureau of Statistics. This measure shows the change in the number of employed people in Australia and is adjusted for seasonal trends. A rise in Employment Change is positive for consumer spending, economic growth, and the Australian Dollar. On the other hand, a low reading is considered bearish for the currency.
