AUD/USD had a little rebound as it fell below its open price level of o.7124 Today (Friday). AUD (Australian dollar ) was unable to maintain above 0.7110 price level during the early Asian trading period. However, it has recovered following the release RBA (Reserve Bank of Australia) MPS (monetary policy statement).
According to the monetary policy of the Reserve Bank of Australia, the inflation targets rose steeply, and the Reserve Bank of Australia perceived that it will remain high till 2024. Australian Central Bank sounded the warning alarms that the core inflation might get to 4.6 percent by the last month of this year (December), which is a 2 percent increase coming from the figures released in February. Certainly, inflation predictions will stay higher than the target envelope and the pressure of pricing will continue to be a heavy load for households. To curtail the resulting high cost of living, the Reserve Bank of Australia aims to drive its rates towards normalcy.
Other Contributing Factors to Why AUD/USD Changed Direction AUD/USD Changed
At the same time, the DXY (Dollar Index) is aiming at reaching its new nineteen-years high of 103.94, which was recorded yesterday(Thursday). The anticipation of a nice increase in the labor force, and an efficient lagging in the Unemployment Rate has advanced the dollar indices (DXY’s) appeals, and this contributed to why the pair AUD/USD changed direction Ahead of US NPF.
The US NPF (Non-Farm Payroll) is perceived at 391,000 during which the unemployment rate will improve to 3.5 percent. A very narrow labor market situation is anticipated to strengthen the Labour Price Index, subsequently bolstering the pressures of inflation. This has increased the chances of a 75bps interest rate increase by the Feds in next month’s monetary policy gathering.
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