Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Decline as US Jobs Data Betters Estimates

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United States Dollars (USD)

The Australian Dollar to US Dollar (AUD/USD) exchange rate softened by around -0.52% during Thursday’s European session.

After having rallied significantly amid speculation the Reserve Bank of Australia (RBA) ended the easing bias, the ‘Aussie’ (AUD) declined. This can be attributed to disappointing labour market data and continued bearishness in iron ore prices.

The US Dollar, meanwhile, advanced versus the majority of its most traded currency peers after a long period of declination. The appreciation is the result of positive labour market data with jobless claims hovering near a 15-year low.

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.7917.

Australian Dollar (AUD) Exchange Rate Ticks Lower after Labour Market Data Printed Poorly

After the RBA opted to cut the benchmark interest rate to a record-low 2.0%, the ‘Aussie’ rallied as analysts predicted that it signalled an end to the easing bias, especially with difficulties surrounding the Sydney housing bubble.

The gains have been mostly pared, however, after domestic labour market data failed to meet with forecast figures. Employment Change was expected to show 4,000 newly employed in April, but the actual result showed -2,900 fewer employed. In addition, the Unemployment Rate met with the median market forecast of a rise from 6.1% to 6.2%.

‘Today’s softer jobs report does not lead us to rush towards calling an additional easing,’ said UBS economist George Tharenou. ‘We continue to see the RBA sitting back and being on hold at two per cent for a prolonged period of time.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate has fallen to a low of 0.7903 today.

US Dollar (USD) Exchange Rate Gains despite Pared Fed Bets

Although the long period of Dollar declination caused futures traders to delay bets as to the timing of a Fed rate hike, the US Dollar did manage to advance on Thursday in response to positive labour market data. Continuing Claims hovered near a 15-year low at 2.2 million, slightly below the median market forecast of 2.27 million claimants. Additionally, Initial Jobless Claims came in under the market consensus of 279,000, with the actual result hitting 265,000.

‘Claims at these types of levels would be consistent with a strong payroll number,’ said Ray Stone, an economist at Stone & McCarthy Research Associates in Princeton, New Jersey, who correctly predicted the applications figure. Jobless claims ‘are the most timely indicator of labour-market conditions, so on the margin things look pretty good.’

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Hold Losses

Given the absence of domestic data to provoke changes, the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to hold losses for the remainder of Thursday’s European session. Friday’s Australasian session ought to see heightened AUD/USD volatility with the RBA statement on monetary policy and China’s trade balance due for publication.

The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high of 0.8005.

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