As the AUD/USD Extends Its Advance above 0.6600, Awaiting the RBA's Rate Decision
AUD/USD maintains its upward momentum near 0.6610 in the early Asian session on Monday. In April, the Nonfarm Payrolls (NFP) of the United States and wage growth were both below expectations. On Tuesday, the RBA is anticipated to maintain the cash rate at 4.35% for the fourth consecutive meeting, while reiterating a hawkish inclination.

On Monday morning, the AUD/USD pair extends its advance to approximately 0.6610 in the early Asian session. The unfavorable April employment report from the United States has impacted the value of the US Dollar (USD) universally. The interest rate decision made by the Reserve Bank of Australia (RBA) on Tuesday will be keenly observed by investors.
The US Bureau of Labor Statistics (BLS) reported on Friday that annual wages fell below 4.0% for the first time in nearly three years, as the labor market in the United States slowed more than anticipated in April. In April, the US Nonfarm Payrolls (NFP) increased by 175,000, which was lower than the market estimate of 243,000, following a revised increase of 315,000 from 303,000 in March. In April, the Unemployment Rate increased from 3.8% to 3.9%, whereas the Average Hourly Earnings decreased from 4.1% to 3.9% year-over-year.
Increasing their expectations that the Federal Reserve (Fed) will reduce its borrowing costs twice this year as opposed to just once prior to the publication of the data, investors now anticipate that the Fed will begin interest rate counting in September. As a consequence, the Greenback experiences weakness, which provides a tailwind for the AUD/USD pair.
As Australian inflation remains persistently high, the RBA is poised to maintain its key interest rate at a 12-year high of 4.35% on Tuesday. Market participants will be more receptive to the RBA press conference subsequent to the monetary policy meeting. A hawkish statement by RBA Governor Michele Bullock could potentially strengthen the Australian Dollar (AUD) in relation to the US Dollar (USD). Analysts from Westpac and Commonwealth Bank predict that the interest rate will reach its highest point of 4.35% in November 2023, before declining to 3.10% by December 2025.
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