During the first half of the European session on Friday, the AUD/USD pair finds itself under pressure and slides to around the 0.6425 mark, registering a decline of roughly 0.40% for the day.
The pair hovers near its lowest point since August, reached earlier on Wednesday. While vulnerable, traders holding bearish positions seem to remain cautious, waiting for more definitive signals regarding the Federal Reserve’s plan for rate adjustments before making new moves. Consequently, the spotlight is on the upcoming US Nonfarm Payrolls (NFP) report. This pivotal employment data will likely influence the Fed’s decisions in its December meeting, affecting demand for the US Dollar which could, in turn, sway the trajectory of the AUD/USD pair.
In the lead-up to this crucial data release, expectations for a less dovish stance from the Fed, combined with a slight dip in global risk appetite, have slowed the recent dip in the USD to its lowest in three weeks. This situation poses a challenge for the Australian Dollar, often perceived as risk-sensitive. Moreover, the rise in expectations for an early rate cut by the Reserve Bank of Australia (RBA), fueled by the recent release of lackluster domestic GDP figures, continues to weigh heavily on the AUD/USD.
Adding to the pressure, ongoing geopolitical tensions, economic challenges in China, and apprehensions regarding lingering trade tariffs from US President-elect Donald Trump further contribute to a downward trend for the Aussie. Any attempts at recovery might be short-lived, seen more as selling opportunities, and could be swiftly reversed. All indications suggest that the AUD/USD is headed for weekly losses, potentially closing at its lowest level of 2024.
The economic spotlight of the moment is on Nonfarm Payrolls. This indicator, released by the US Bureau of Labor Statistics, shows the number of new jobs created across various industries in the US, excluding agriculture. Known for its volatility, this monthly figure is closely watched as significant revisions can rock the Forex market. High job growth figures typically boost the US Dollar, whereas lower results tend to weaken it. However, the reaction depends greatly on how the market interprets the complete set of data, including revisions from previous months and the overall unemployment rate.
