Ella 
Last week concluded on a frustrating note for AUD/USD traders, as the pair faced its third consecutive month of robust US Consumer Price Index (CPI) data and a wave of risk aversion flows. Consequently, the AUD/USD tumbled to year-to-date lows, marking its most substantial weekly loss (-1.76%) since November last year.
This setback for the AUD/USD follows closely on the heels of optimism just a week prior, fueled by soaring commodity prices and better-than-expected global Purchasing Managers’ Index (PMI) data, hinting at a potential surge above the .6700c mark for the first time in three months.
However, the trajectory of the AUD/USD in the coming week remains uncertain, hinging on several pivotal factors. These include tomorrow’s release of Chinese Gross Domestic Product (GDP) data, movements in commodity prices, prevailing market sentiment, insights from a slate of Federal Reserve speakers scheduled for this week, and, notably, Thursday’s highly anticipated Australian jobs report.
Anticipation Surrounding the Australian Jobs Report for March (Thursday, April 18, at 11:30 am)
In February, the Australian economy witnessed a remarkable addition of 116.5k jobs, surpassing consensus expectations of +40k. This surge in employment drove the unemployment rate down to 3.7%, its lowest level since September 2023, from the previous 4.1%. Concurrently, the participation rate edged up to 66.7% from 66.6%. Moreover, the underutilization rate, a composite measure of unemployment and underemployment, decreased by 0.5 percentage points to 10.3%.
The Australian Bureau of Statistics (ABS) attributed the robust job growth in February to a “larger than usual number of people in December and January who had jobs that they were waiting to start or to return to.” This translated into an exceptionally high influx of individuals into employment in February, surpassing even the figures from the same month last year.
However, market expectations for March anticipate a contraction of 40k jobs, with the unemployment rate projected to rebound to 4% from the previous 3.7%. As seasonal variations associated with the holiday period dissipate, signs of labor market cooling are anticipated to surface further. Consequently, analysts reiterate predictions of a 25-basis point rate cut by the Reserve Bank of Australia (RBA) in August, followed by an additional cut in November, potentially culminating in a year-end cash rate of 3.85%.
As the markets eagerly await the release of crucial economic data and monitor global developments, the AUD/USD trajectory remains subject to volatility and uncertainty, with investors bracing for potential shifts in market dynamics.
