AUD Resumes Advance as US Dollar Loses Momentum After Stronger-Than-Expected Jobs Data
The Australian Dollar has resumed its advance against the US Dollar after a brief period of weakness following the release of the United States' nonfarm payrolls (NFP) data. The stronger-than-expected figures showed an increase of 162K in August, well above market expectations for a 56K gain.
The initial reaction was a drop to 0.7173 before the AUD/USD pair reversed as the US Dollar struggled to capitalize on the upbeat numbers. Despite strengthening expectations of a Federal Reserve rate hike at the September 15-16 meeting, the Greenback quickly lost momentum and the DXY index trades around 99.10.
The CME FedWatch Tool now prices in around a 60% chance of an increase, up from 50% before the NFP release. The outcome of the September meeting is expected to hinge on next week's US Consumer Price Index (CPI) and Producer Price Index (PPI) reports.
Cleveland Fed President Beth Hammack stated that policy is not restrictive, adding that 'inflation is too high, and the longer it stays above our objective, the harder it will be to bring it back down.'