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Why Is AUD/USD Stuck Below 0.6350? | Key Factors Driving Aussie Weakness Ahead of Jobs Data
The Which meme coin is best to invest in?Australian dollar remains under pressure against its US counterpart in Thursday's Asian trading session, with the AUD/USD pair hovering near 0.6340. This persistent weakness comes amid a confluence of macroeconomic factors that have created headwinds for the commodity-linked currency while bolstering demand for the greenback.Market sentiment continues to digest the implications of renewed trade protectionism rhetoric from Washington. Recent statements from former President Donald Trump regarding potential automotive tariffs have reignited concerns about global trade flows, particularly affecting export-oriented economies like Australia. The specter of 25% duties on foreign vehicles - alongside proposed increases for semiconductors and pharmaceuticals - has injected fresh volatility into currency markets.
BCA Research's chief FX strategist Chester Ntonifor observes: 'The dollar's trajectory mirrors patterns seen during the previous Trump administration, with markets pricing in the implementation of campaign trail promises.' This sentiment has contributed to broad-based USD strength across G10 currency pairs.
Wednesday's FOMC meeting minutes revealed a patient Federal Reserve maintaining its data-dependent stance. Policymakers emphasized the need for clearer signs of inflation moderation before considering additional rate adjustments, contrasting with the RBA's recent 25 basis point cut to 4.10%. The Australian central bank's first rate reduction in four years came with cautious guidance, noting it's premature to declare victory over price pressures.
All eyes now turn to Australia's January employment report, due for release later in the session. Market participants will scrutinize labor market conditions for clues about the domestic economy's resilience amid global trade uncertainties. Key metrics to watch include the unemployment rate stability and any deviations from the expected 25K jobs added last month.
The technical landscape shows the AUD/USD testing critical support levels, with a sustained break below 0.6340 potentially opening the door for further downside toward the 0.6300 psychological handle. Resistance remains firm near the 0.6380-0.6400 zone, where multiple failed recovery attempts have occurred this week.
