Weaker US Jobs Data Boosts Australian Dollar Amid RBA Rate Hike Uncertainty

The Australian Dollar (AUD) is trading higher at around 0.6955 during Monday’s early Asian session, supported by weaker-than-expected US jobs data. The US Bureau of Labor Statistics reported that Nonfarm Payrolls increased by just 29,000 jobs in September, well below the market consensus of 90,000. This data, along with a revised August figure of 133,000 jobs, has reduced expectations for a Federal Reserve rate hike in October, now priced at just 22.1%, though December remains likely at 87.2%.

On the domestic front, the Reserve Bank of Australia (RBA) is seen as unlikely to raise interest rates in November, with market probabilities falling to around 20%. Analysts at Commerzbank argue that softer inflation and housing market strains suggest the RBA should adopt a wait-and-see approach. They highlight declining building permits and falling property prices in major cities as reasons for caution.

Meanwhile, a hawkish tilt from Fed official Christopher Logan has boosted US Dollar sentiment, with his speech underscoring a stronger tightening bias. The FXS Fed Sentiment Index rose to 136.59, reinforcing expectations for further rate hikes and supporting the Dollar against peers like the Euro and Yen.

Technically, the AUD/USD pair remains bearish, trading below the 100-day simple moving average. The Relative Strength Index (14) at 31.5 suggests downside momentum is still dominant but increasingly stretched. Key resistance levels are seen at 0.7055 and 0.7070, while support lies at 0.6895.