The AUD/USD currency pair is facing a challenging situation as it hovers near the 0.6425 level. In the early part of the European session on Friday, it has been under pressure and is trading with a downward bias, showing a decline of approximately 0.40% for the day. The pair is close to the lowest point it reached in August, which was touched on Wednesday, and appears to be in a vulnerable position. However, bearish traders are holding back from making new bets as they await more clarity on the Federal Reserve’s rate-cut path. The spotlight is firmly on the upcoming US Nonfarm Payrolls (NFP) report, as this crucial jobs data will play a significant role in guiding the Fed policymakers’ decision at their December meeting and will have an impact on the demand for the US Dollar (USD), thereby influencing the AUD/USD pair.
As we approach the key data release, expectations of a less dovish Fed stance, combined with a mild deterioration in global risk sentiment, have managed to limit the recent decline of the USD to a three-week low. This has also posed an obstacle for the Australian Dollar (AUD), which is considered a riskier currency. Additionally, the increasing speculation of an early interest rate cut by the Reserve Bank of Australia (RBA), following the softer domestic GDP growth figures released earlier this week, has contributed to the bearish sentiment surrounding the AUD/USD pair.
Geopolitical tensions that continue to persist, China’s economic challenges, and concerns regarding the potential trade tariffs under US President-elect Donald Trump all suggest that the Aussie, which is sensitive to risk, is likely to face downward pressure. Any attempt at a recovery in the AUD/USD pair might be seen as a chance to sell, and there is a risk that such a recovery could quickly lose steam. It seems likely that the AUD/USD pair will end the week with losses and may even record its lowest weekly close for 2024.
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Pound Sterling’s Dip on BoE Bailey’s 2025 Rate Cut Projection
AUD/USD’s Plunge Near 0.6400 Amid Weak Aussie GDP and RBA Expectations
