Australian Dollar Remains Under Pressure
The Australian dollar remained weak against the US dollar in Thursday's Asian trading session. AUD/USD continued its decline for the eighth consecutive day, hovering around the 0.6900 level. This pressure occurred despite relatively strong Australian labor data.
The latest data showed Australia's unemployment rate fell to 4.4% in May from 4.5% in April, in line with market expectations. Jobs also increased by 40,300, higher than the forecast of around 25,000. This figure signals that the Australian labor market remains quite solid after losing 40,700 jobs in April.
However, detailed data suggests the labor recovery is not yet fully robust. Most of the job gains came from the part-time sector, which rose by 35,200, while full-time jobs only increased by 5,200. This means that while the headline data appears positive, the quality of the recovery remains uncertain, as job growth is largely driven by part-time jobs.
The greatest pressure on AUD/USD comes from the strengthening US dollar. The market is increasingly confident that the Federal Reserve still has the potential to raise interest rates by the end of the year after Fed Chairman Kevin Warsh emphasized its focus on controlling inflation. Expectations of a US interest rate hike have made the greenback more attractive, making it difficult for the Australian dollar to gain traction despite improving domestic data.
Investors are now awaiting US Personal Consumption Expenditures (PCE) inflation data. If PCE data shows inflation remains high, expectations of a Fed rate hike could strengthen, and the AUD/USD is at risk of weakening again. However, if inflation is lower than expected, the US dollar could correct, opening up the opportunity for a technical rebound for the Australian dollar. (Asd)
Source: Newsmaker.id
