AUD/USD surpasses 0.6700 firmly on hawkish RBA minutes, US NFP eyed
- AUD/USD has swiftly crossed the crucial resistance of 0.6700 amid hawkish RBA minutes.
- A scrutiny of the Trade Balance report showed that Australian goods exports to China rose by 31% on an annual basis.
- The street is anticipating a decline in the number of fresh payrolls addition in the US labor market to 179K from the former release of 236K.
The AUD/USD pair has climbed strongly above the round-level resistance of 0.6700 amid the release of hawkish Reserve Bank of Australia (RBA) minutes. The minutes claim that more rate hikes will be announced if inflation continues to remain persistent. Interest rates would drop to 3% in mid-2025. The RBA believes that energy prices will considerably contribute to inflation in the coming year.
This week, the RBA unexpectedly hiked its Official Cash Rate (OCR) by 25 basis points (bps) to 3.85%. It seems that RBA Governor Philip Lower considered that the current monetary policy is not restrictive enough to tame Australian inflation or inflation expectations are still solid and need for interest rates right now to curb the forward mess.
On Thursday, the Australian Dollar remained in action after the release of the upbeat Trade Balance data. A scrutiny of the Trade Balance report showed that Australian goods exports to China rose by 31% to hit A$19 billion in March on an annual basis. Reuters reported that the world’s second-largest economy, China sucked more iron from the Australian steel industry and lowered barriers to thermal coal shipments amid growing diplomatic relations.
Meanwhile, the US Dollar Index (DXY) has retreated after a short-lived pullback to near 101.25. The USD Index is expected to test its crucial support of 101.00 amid headwinds of the US banking crisis and debt ceiling issues.
For further guidance, US official labor market data (April) will be keenly watched. The street is anticipating a decline in the number of fresh payrolls addition to 179K from the former release of 236K. However, the Unemployment Rate is seen unchanged at 3.5%.