Aussie Holds Steady as Markets Wait on US Jobs Report

The Australian and New Zealand dollars remain steady ahead of key economic events that could impact interest rates in both countries. On Friday, investors were waiting to see how a US jobs report would affect the chance of a rate hike there.

Australia's Reserve Bank is also set to meet on August 11, with all 37 analysts polled by Reuters expecting no change in the cash rate of 4.35%. However, some expect further tightening may be needed to combat inflation. Paul Bloxham, head of Australian economics at HSBC, believes that a slowdown in economic growth and a cooling housing market will lead to a looser jobs market, allowing core inflation to reach target without further rate hikes.

Bloxham also predicts that the RBA may begin cutting its cash rate in H2 2027. With markets implying just a 3% chance of a rate rise next week and around a 16% probability for September, some analysts are looking to November for potential tightening, citing the risk of an alarming third-quarter inflation report.

The Aussie's performance is also tied to the US Federal Reserve's interest rate decision on September 16. If rates do rise in the US, it could pressure the Aussie dollar. Conversely, a weak US jobs report could see the Aussie test resistance again.