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17/07/24
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AUD Flat Ahead of Employment Report
On Wednesday, the Australian dollar was steady and AUD/USD traded at about 0.6743, up 0.08% for the day in the North American session.
The June employment report for Australia will be released on Thursday. The market estimate is at 20K, compared to May’s 39.7K, which was a 3-month high. The case for the Reserve Bank of Australia to not lower interest rates was supported by a tight labor market.
Inflation hasn’t dropped as fast as the RBA was hoping and in June rose unexpectedly to 4% from 3.6%, its highest level this year. The inflation acceleration has policymakers worried and the RBA has kept the possibility of an increase in rates on the table.
The central bank has kept the cash rate at 4.35% since Dec. last year and a rate cut in the near term is unlikely, barring an unexpected drop in inflation. According to the ASX RBA rate tracker, the markets are pricing in a 15% chance of a rate cut at the August 6 meeting.
During the rest of the week, a host of Federal Reserve officials will speak, and markets will be hoping for clues about upcoming rate decisions.
Fed Governor Adriana Kugler said on Tuesday she was optimistic that inflation was moving to the 2% target.
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