Ella 
The AUD/USD pair fluctuated around the 0.6600 level on Tuesday as AUD/USD traders prepared for the release of newly released Australian Consumer Price Index (CPI) inflation data. The Federal Reserve will announce its next interest rate decision on Thursday and will be released on Friday. U.S. nonfarm payrolls (NFP) labor data.
Australia’s seasonally adjusted quarterly inflation rate in the fourth quarter is expected to fall to 0.8% from the previous value of 1.2%, and the Reserve Bank of Australia’s annual inflation forecast for the fourth quarter will also decline from 5.2% to 4.3%.
Australian monthly inflation data preview: Inflation expected to slow further
The highlight of the week will be the Federal Reserve’s renewed call for a rate hike and Friday’s U.S. non-farm payrolls data. The market generally expects the Federal Reserve to remain on hold this week, but investors who expect the Fed to cut interest rates will find it difficult to give up their bets on a rate cut in March. The Chicago Mercantile Exchange Fed Watch Tool shows that 44% of investors in the interest rate swap market still expect 3 The Federal Reserve cuts interest rates this month.
U.S. nonfarm payrolls data due this week is expected to show a slight cooling in the U.S. labor market, with nonfarm payrolls expected to be 180,000 in January compared with 216,000 in December. The market has generally underestimated the level of non-farm payrolls expectations in the near future. If non-farm payrolls do not rise, investors may reduce the probability of an early interest rate cut due to the deep-rooted health of the U.S. labor market and then provoke market reactions based on changes in the outlook for interest rate policy.
