Ella 
In the Asian market on Thursday, the AUD/USD continued to rise based on its rebound from the 0.6380 area following the release of US inflation the day before, and gained some follow-up momentum. AUD/USD maintained gains around one-and-a-half week highs around 0.6400, with little movement following the latest data from Australia.
The Australian Bureau of Statistics reported that employment rose by 64,900 in August, against expectations of 23,000 and after -14,600 the previous month. Meanwhile, the unemployment rate is expected to hold steady at 3.7%, although the participation rate rose to 67% in August. However, Australian employment data did not provide new impetus for AUD/USD amid speculation that the Reserve Bank of Australia (RBA) may have ended its interest rate hike cycle.
In addition, continued market concerns about the deteriorating economic conditions of Australia’s largest trading partner, China, have also hindered traders from launching a new round of bets on the Australian dollar, which represents the Chinese economy. However, the downside for AUD/USD appears to be limited amid modest U.S. dollar weakness. AUD/USD has been pressured by growing expectations that the Federal Reserve (Fed) will keep interest rates steady amid no clear surprises in US consumer inflation data.
In fact, the Fed is widely expected to remain on hold at next week’s monetary policy meeting. Markets are currently pricing in a more than 50% chance of a 25 basis point rate hike in November or December. This requires USD shorts and investors to remain cautious before taking positions on further gains in AUD/USD.
Market focus now turns to U.S. economic data, with U.S. initial jobless claims, producer price index (PPI) and monthly retail sales expected to be released early in the U.S. session. These data, along with potential market volatility following the ECB meeting, could impact USD volatility and lead to short-term AUD/USD trading opportunities.
