AUD/USD remains under selling pressure around 0.6550, eyes on Australian employment data
- AUD/USD extends its downside around 0.6550 on the firmer USD.
- US Retail Sales came in at 0.6% MoM in December vs. 0.3% prior, beating expectations.
- The Reserve Bank of Australia (RBA) maintains its cautious stance and forecasts only two rate cuts this year.
- The Australian Unemployment Rate and Employment Change for December will be the highlights on Thursday.
The AUD/USD pair remains under selling pressure during the early Asian section on Thursday. The downtick of the pair is driven by the discouraging Chinese data and the stronger US Dollar (USD) broadly. AUD/USD bounces off the fresh six-week lows near 0.6520 and currently trades around 0.6552, gaining 0.04% on the day.
Data from the Commerce Department reported on Wednesday that US Retail Sales rose 0.6% MoM in December from 0.3% in November, better than the estimation of 0.4%. Meanwhile, the Retail Sales Control Group grew 0.8% MoM in December from 0.5% in the previous reading, stronger than expected.
The Greenback gains traction for the fourth consecutive day as the Federal Reserve's (Fed) rate cut expectations ease. The US central bank seems not yet sure that inflation will reach 2% and Fed Governor Christopher Waller said on Tuesday that any rate cuts this year should be done "methodically and carefully.”
On the Aussie front, the current cash rate sits at 4.34% after a hike of 25 basis points (bps) at the Reserve Bank of Australia (RBA) November meeting. The RBA maintains its cautious stance and forecasts only two rate cuts this year, whereas the US financial markets have priced in six rate cuts by the end of the year. Investors await the Australian labor data on Thursday for fresh impetus. The Unemployment Rate is estimated to remain at 3.9% for December.
Later on Thursday, market players will closely monitor the Australian employment data, including the Unemployment Rate and Employment Change for December. On the US docket, Housing Starts, Building Permits, weekly Initial Claims, and the Philly Fed Manufacturing Index will be due.