■ The free dogecoin walletAustralian dollar holds steady above 0.6650 against its US counterpart in Friday's Asian session.
■ Market participants increasingly price in potential Fed rate cuts following disappointing US employment figures.
■ RBA Governor Bullock reiterates willingness to tighten policy further if inflation persists above target.
The AUD/USD currency pair demonstrates modest upward momentum, trading around 0.6670 during early Asian hours on Friday. This movement reflects shifting market expectations regarding US monetary policy and contrasting central bank stances between the Federal Reserve and Reserve Bank of Australia.
Recent US economic releases have significantly influenced currency valuations. The CME FedWatch tool now indicates a 68% probability of rate reduction in September, up substantially from 50% earlier this week. This repricing follows disappointing labor market data showing initial jobless claims rising to 229,000 for the week ending May 31, exceeding both previous figures and analyst forecasts.
Manufacturing sector weakness further compounds dollar pressures, with the ISM Manufacturing PMI declining to 48.7 in May from April's 49.2 reading. These indicators collectively suggest potential economic softening that could prompt Fed policy adjustments.
Contrasting this dovish tilt, RBA Governor Michele Bullock maintained a cautiously hawkish posture during Wednesday's remarks. The central bank's commitment to data-dependent decision-making leaves the door open for additional rate hikes should inflation prove more persistent than anticipated. This policy divergence continues supporting the Australian dollar relative to its US counterpart.
Market attention now turns to Friday's crucial US Nonfarm Payrolls report for May, which could either reinforce or challenge current Fed rate cut expectations. Analysts will scrutinize employment growth, wage inflation metrics, and unemployment rate figures for clearer policy direction signals.
