The AUD/USD pair gained some positive momentum on Thursday as upbeat Australian jobs data boosted the domestic currency. The latest figures from the Australian Bureau of Statistics (ABS) showed that the country’s unemployment rate dropped to 4.6% in February, beating analysts’ expectations of 5.0%. The data also revealed that the Australian economy added 88,700 jobs last month, surpassing the estimated 30,000 job additions.
The strong jobs data lifted the Australian dollar, which was already supported by a weaker US dollar. The greenback was trading modestly weaker against its major rivals, as investors remained cautious ahead of the US Federal Reserve’s policy decision next week.
Banking Crisis Fears and Fed’s Hawkish Expectations Limit USD Losses
However, the AUD/USD pair struggled to capitalize on the positive momentum due to concerns over banking crises and the Fed’s hawkish expectations. The ongoing crisis in the Chinese property market and the potential spillover effect on global markets have raised concerns over financial stability, leading investors to flock to safe-haven assets like the US dollar.
Moreover, the Fed’s hawkish stance, with expectations of a possible interest rate hike in 2022, has also limited the USD losses. The central bank has been signaling its intention to start tapering its bond-buying program, which could lead to higher interest rates and support the US dollar.
Outlook for AUD/USD Pair
The outlook for the AUD/USD pair remains uncertain amid conflicting market forces. While positive Australian jobs data and a weaker US dollar support the Australian currency, concerns over banking crises and the Fed’s hawkish expectations limit the upside potential.
Investors will closely monitor the Fed’s policy decision next week and any comments on the timing of tapering and interest rate hikes. The ongoing situation in the Chinese property market and its impact on global financial stability will also be closely watched.
In conclusion, the AUD/USD pair witnessed fresh buying on Thursday, backed by positive Australian jobs data and a weaker US dollar. However, concerns over banking crises and the Fed’s hawkish expectations limited the pair’s upside potential. The outlook for the pair remains uncertain, and investors will closely monitor the Fed’s policy decision and the ongoing situation in the Chinese property market.