The reverberations from the FOMC should support USD via yields and skittish equities. Analysts at Westpac look for the AUD/USD pair to test the 200-day moving average (DMA), currently at 0.7554.
Australia unemployment rate slides to 5.1%, below pre-pandemic levels
“The FOMC meeting was a game-changer for the US dollar’s prospects near term. It posted substantial gains against all G10 currencies on the week, so AUD/USD’s 2 month lows under 0.7600 don’t tell us much new about underlying demand for the aussie.”
“As for domestic developments, an emerging COVID-19 cluster in Sydney is a concern but RBA Governor Lowe was broadly upbeat.”
“Lowe’s speech showed Australia’s outperformance on the labour market, even before today’s May data, which included the largest monthly rise in full-time employment on record (98K) and a steep slide in the unemployment rate.”
“Still, Lowe emphasised that ending QE in Sep was not an option at the July meeting. And the reverberations from the FOMC should support USD via yields and skittish equities. Look for the aussie to test the 200-DMA at 0.7554.”