FX.co ★ Australian Dollar Trades Sideways

The Australian dollar saw a modest increase, rising above $0.652 on Friday, maintaining a narrow trading range throughout the week. Investor focus is now on the upcoming US jobs report, anticipated to be a key indicator for possible Federal Reserve interest rate cuts this month. The US dollar faced downward pressure due to signs of labor market softness, including a decline in job openings and an increase in layoffs, leading many traders to forecast a rate reduction by the Fed in September. The all-important US nonfarm payrolls report will offer more comprehensive insights into labor market trends. Domestically, positive Australian economic indicators this week have prompted investors to lower expectations for additional rate cuts by the Reserve Bank of Australia. The probability of a quarter-point rate cut in November has decreased to 80%, down from a full certainty earlier in the week. Economists emphasize that robust household consumption and improved sentiment are bolstering the Australian dollar, while stable consumer spending and a strong labor market may prevent further rate cuts.