Australian Dollar capitalizes on risk-on mood, improving hawkish RBA bets
The Australian Dollar (AUD) is up against its major currency pairs, trading 0.23% higher to near 0.6940 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair gains as a slight decline in hawkish Federal Reserve (Fed) prospects has lifted market sentiment.
S&P 500 futures are up 0.22% at around 7,500 at press time, reflecting a risk-on market mood. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 100.75.
The odds of the Fed delivering at least one interest rate hike in the September policy meeting have diminished to 53.2% from almost 64% seen on Wednesday, according to the CME FedWatch tool.
Traders have trimmed hawkish Fed bets after the release of weak United States (US) Nonfarm Payrolls (NFP) data for June on Thursday, which showed that the economy created 57K fresh jobs in June, significantly lower than estimates of 110K. Also, the May data was revised lower to 129K from 172K.
On the domestic front, hawkish remarks from Reserve Bank of Australia (RBA) officials, as released in the June policy meeting minutes on Tuesday, have also strengthened the antipodean. “Will take necessary steps to ensure price stability, including potential rate hikes,” RBA policy minutes showed.
The remarks in RBA policy meeting minutes were in contrast with market expectations, which were signaling that the central bank’s monetary tightening cycle had come to an end.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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