US jobs report key for greenback
The US dollar strengthened overnight ahead of tonight’s all-important US jobs report.
The August report is seen as pivotal ahead of the upcoming Federal Reserve decision. While recent labour market weakness has increased expectations for rate cuts, the Fed remains cautious.
Historically, August jobs data tends to miss forecasts—12 of the past 18 reports have come in below expectations. Analysts point to summer holidays and low survey response rates as contributing factors. (The numbers are often revised higher as employees return from their break.)
Markets are looking for 75,000 new jobs, with the unemployment rate expected to rise from 4.2% to 4.3%.
Aussie spending spree may stall rate cuts
Australians are spending more as incomes and household wealth rise, and that could delay interest rate cuts, says Reserve Bank Governor Michele Bullock.
Following strong second-quarter growth, Bullock noted that increased consumer activity is boosting the economy. However, she warned that if the trend continues, “there may not be many rate reductions left,” according to Bloomberg.
On global trade, Bullock said the Reserve Bank’s worst fears haven’t materialised, with most countries avoiding retaliation against Trump-era tariffs. Still, she called tariffs “a significant source of uncertainty for the global economy.”
The Australian dollar remains stuck in a four-month trading range between 0.6400 and 0.6600 against the US dollar.
Key support levels are at the 50-day EMA of 0.6503 and the 100-day EMA of 0.6477.
Resistance remains at the key psychological level of 0.6600.
Kiwi lower as Fed voices split on rate cuts
The NZD fell again overnight, with NZD/USD hovering near five-month lows.
Federal Reserve officials are sending mixed signals on the path ahead for interest rates.
Governor Christopher Waller backed a September start to rate cuts, calling for several reductions in the months ahead.
Atlanta Fed President Raphael Bostic took a more cautious stance, saying one cut should be enough for the rest of the year.
St. Louis Fed President Alberto Musalem struck a neutral tone, saying current rates align with economic conditions but flagged rising risks in the job market. He also expects tariff-driven inflation to ease within two to three quarters.
NZD/USD remains below key resistance levels at the 100-day EMA of 0.5921 and the 50-day EMA of 0.5924.
USD higher ahead of jobs report
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 31 August – 5 September
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
