Ahead of the US NFP, the Australian dollar swings sideways as the market is cautious.
- Ahead of Friday’s announcement of the US Nonfarm Payrolls, the Australian dollar is stable.
- Reducing worries over the US-China trade situation helps the AUD.
- US Initial Jobless Claims increased to 219K last week, compared to 213K and 208K the week before.
On Friday, the US dollar (USD) and the Australian dollar (AUD) consolidate. However, as US President Donald Trump and Chinese President Xi Jinping prepare to negotiate possible tariff rollbacks, the AUD/USD pair saw upward support as US-China trade tensions eased. China, Australia’s key trading partner, retaliated against the new 10% US tariff that took effect on Tuesday. However, on Monday afternoon, US President Donald Trump stated that he would likely speak with China within 24 hours. Trump also warned, “If we can’t reach a deal with China, the tariffs will be very, very substantial.” Despite this, no further updates have emerged.
Markets now place a 95% probability of a Reserve Bank of Australia (RBA) rate cut from 4.35% to 4.10% in February, weakening the AUD’s resilience. The RBA has kept the Official Cash Rate (OCR) at 4.35% since November 2023, emphasizing that inflation must “sustainably” return to its 2%-3% target range before considering any policy easing.
Ahead of the US jobs report, the Australian dollar may weaken due to market caution
- As of this writing, the US Dollar Index (DXY), which compares the value of the US dollar to six other major currencies, is up close to 107.70. Ahead of a significant US jobs report, attitude may shift cautiously, which might help the greenback. The Federal Reserve’s (Fed) monetary policy is anticipated to be influenced by Friday’s US Nonfarm Payrolls (NFP) data, which traders are anticipating.
- The US Department of Labor (DoL) announced on Thursday that the number of initial jobless claims in the United States increased to 219K for the week ending January 31. This print was higher than the previous week’s corrected total of 208K (from 207K) and exceeded original forecasts of 213K.
- The US ISM Services PMI decreased from 54.0 (revised from 54.1) in December to 52.8 in January. This figure was lower than the 54.3 market consensus.
- Lorie Logan, president of the Federal Reserve Bank of Dallas, made waves late Thursday when she said that although there has been a lot of progress on inflation, the US labor market is still too robust for the Fed to consider rate decreases anytime soon. Logan also admitted that inflation alone could not be enough to trigger a rate cut, even if it hits the 2% target.
- Philip Jefferson, the vice chair of the Federal Reserve, said Thursday that he was OK with the Federal Funds Rate being at its current level and that he would consider the overall effects of Trump’s policies before taking any more action. He also underlined that even with a 100 basis point drop, the Fed’s rate is still constrictive for the economy.
- The proposed 25% tariffs on imports from Canada and Mexico will be suspended for 30 days, as agreed by President Trump. This decision follows pledges made by Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau to strengthen border security measures in response to worries about drug trafficking and illegal immigration.
- Australia’s trade surplus dropped from 6,792 million to 5,085 million in December, falling short of the 7,000 million forecast. While imports rose 5.9% MoM, up from 1.4% the previous month, exports grew 1.1% MoM, easing from a 4.2% growth in November.
- The Judo Bank Composite PMI for Australia increased from 50.2 in December to 51.1 in January, indicating a little increase in private sector activity. In the meantime, the Judo Bank Services PMI increased from 50.8 to 51.2, signaling the services sector’s eleventh straight month of growth. Growth was the strongest since August, while being mild.
The Australian dollar stays stable below 0.6300.
Stronger short-term positive momentum is indicated by the AUD/USD pair’s Friday hover around 0.6290, which keeps it above the nine- and 14-day Exponential Moving Averages (EMAs) on the daily chart. The bullish trend is also supported by the 14-day Relative Strength Index (RSI), which stays above the 50 mark.
Due to market trends and prop firm tech developments, the AUD/USD pair may test the seven-week high of 0.6330, which was last reached on January 24.
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.11% | 0.03% | 0.11% | 0.02% | -0.02% | 0.16% | |
| EUR | -0.08% | 0.03% | -0.06% | 0.03% | -0.08% | -0.10% | 0.07% | |
| GBP | -0.11% | -0.03% | -0.09% | -0.00% | -0.10% | -0.13% | 0.05% | |
| JPY | -0.03% | 0.06% | 0.09% | 0.08% | -0.02% | -0.08% | 0.11% | |
| CAD | -0.11% | -0.03% | 0.00% | -0.08% | -0.10% | -0.13% | 0.05% | |
| AUD | -0.02% | 0.08% | 0.10% | 0.02% | 0.10% | -0.04% | 0.15% | |
| NZD | 0.02% | 0.10% | 0.13% | 0.08% | 0.13% | 0.04% | 0.18% | |
| CHF | -0.16% | -0.07% | -0.05% | -0.11% | -0.05% | -0.15% | -0.18% |