The Australian dollar has pushed higher on Monday. In the North American session, AUD/USD is trading at 0.6600, up 0.35%.
Australia’s Westpac consumer confidence is expected to rebound in April after a 1.8% decline in March. The market estimate stands at 0.5%. We’ll also get a look at the mood of the business sector, with NAB business confidence expected to fall to -3 in March, down from 0 in February.
Consumers and businesses are in a surly mood about the economy and last month’s pause from the Reserve Bank of Australia increased skepticism about a rate cut. The RBA has maintained the cash rate three straight times and hasn’t signaled when it will end its “higher for lower stance”.
The March RBA minutes didn’t mention the possibility of a rate hike, the first time that’s happened in the current tightening cycle, but the hot US nonfarm payrolls release may have pushed back the timing of an RBA cut. A rate cut from the RBA would have more impact if the Federal Reserve lowered rates first but the nonfarm payrolls data has pushed the likely timing of a first rate cut in the US from July to September.
US nonfarm payrolls sparkle
US nonfarm payrolls jumped to 303,000 in March, up from a revised 270,000 in February and blowing past the market estimate of 200,000. The unemployment rate dipped lower to 3.8%, down from 3.9% and below the market estimate of 3.9%. Wage growth matched expectations at 4.1%, down from 4.3%.
The strong release points to a robust labour market, and investors have doubts if the Fed will cut more than twice this year. This mark a huge turnaround in market expectations – in January, an exuberant market had priced in six rate cuts in 2024, but the US economy is performing much better than expected despite high interest rates.
AUD/USD Technical
- AUD/USD tested resistance at 0.6606 earlier. Above, there is resistance at 0.6632
- 0.6577 and 0.6551 are providing support
