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Mar 20 - 10:55 PM

AUD/USD - COMMENT-AUD/USD Set To Rise On Dovish Fed, Strong Jobs Data

By John Noonan  —  Mar 20 - 10:10 PM

The Australian dollar is poised to climb after the U.S. Federal Reserve stuck to its projection of three 25 basis-point rate cuts in 2024 and Australia's February jobs data showed unemployment diving far more than expected.

The AUD/USD declined after the Reserve Bank of Australia shifted to a neutral from a mild tightening bias on Tuesday, while holding rates at 4.35% and emphasising it will remain data-dependent.

At the press conference following Tuesday's decision, RBA Governor Michele Bullock said the central bank will be "keeping a keen eye on employment numbers". Thursday's blow-out Australian job numbers will certainly increase concerns over an already tight labour market.

Before the release of the jobs data the market was pricing in a 75% chance of a 25 bps rate cut at the Aug 6 RBA meeting.
That has been reduced to a 62% chance, according to LSEG 0#RBAWATCH.
A near-90% chance of two 25 bps
cuts by year-end has also been reduced to a 72% chance.

The AUD/USD has broken above 0.6600 and is trading 1.35% higher than Tuesday's close around 0.6530.
The next level of resistance is the March 8 high at 0.6667. The current rally targets the 61.8 Fibonacci retracement of the December-February drop at 0.6707.
Only a close below the 200-day moving average at 0.6556 would throw doubt on the bullish outlook.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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