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AUDUSD Rallies Higher Despite the Upbeat US Nonfarm Payrolls

Analyst Team trader
Updated 2 Jun 2023

The AUDUSD currency pair was trading up over 50 pips as the Australian dollar held on to its earlier gains against the US dollar despite the release of upbeat US nonfarm payrolls data, which came in at 339,00 jobs versus analysts' consensus estimates of 190,000 jobs.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


However, the US unemployment rate ticked higher to 3.7% representing a 7-month high. The unemployment rate beat analysts' expectations set at 3.5% and was much higher than the previous figure of 3.4%. Today’s nonfarm payrolls report also saw the April jobs revised higher to 294,000 from the initial figure of 253,000.

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The mixed employment data did little to boost the US dollar as tracked by the US Dollar index (DXY), which was up just 12 pips (0.12%) at writing. However, the solid employment data could signal that the Fed can retain a hawkish stance given the robust US jobs market.

The AUDUSD currency pair was rallying higher for the second consecutive day as investors trined bullish on the Aussie, driving it higher against the US dollar. The Bullish investor sentiment was showing no signs of abating at writing. 

The US dollar was also weighed down by the low labour force participation rate of 62.6% despite the optimism associated with passing the debt limit legislation. 

The Aussie was also boosted by the positive Chinese manufacturing industry data released yesterday, which showed that the industry had registered unexpected positive growth in May. The Aussie’s fortunes are inextricably linked to China, given that China is Australia’s largest trade partner by trade volumes. 

The uncertainty surrounding whether the US Federal Reserve would hike rates at its June meeting continues to weigh on the US dollar, which has seen most currencies rally against the world’s reserve currency this week. 

The Fed seems likely to skip a rate hike for the first time after ten consecutive rate hikes starting in March 2022. The dollar’s weakness is expected as the Fed teeters on the edge of ending its rate hiking cycle. Meanwhile, the Australian dollar remains stronger than the US dollar for now. 

*This is not investment advice. 

The AUDUSD price chart.

The AUDUSD currency pair was trading up 57.4 pips (0.86%) after the release of the US nonfarm payrolls. 


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.