AUD/USD Struggles Near 0.6630 as Traders Await Critical NFP Data

The Australian Dollar faces continued selling pressure against the US Dollar for a fourth consecutive session, with the AUD/USD pair hovering around the 0.6630 level during early Asian trading on Tuesday. The latest decline represents a decline of just over 0.10% as multiple headwinds converge on the currency pair.

Mixed Employment Data and Chinese Economic Concerns Pile Pressure

Recent Australian employment figures released last week showed mixed signals, failing to provide meaningful support for the AUD. Simultaneously, disappointing macroeconomic data from China on Monday has rekindled worries about the world’s second-largest economy, compounding weakness in the Australian currency. This combination, coupled with a softer global risk environment and weaker equity market sentiment, has intensified selling pressure on the perceived risk-sensitive Australian Dollar.

RBA’s Hawkish Messaging Provides Critical Support

Despite the selling pressure, the Reserve Bank of Australia’s relatively hawkish stance has prevented steeper declines in the AUD/USD pair. RBA Governor Michele Bullock signaled last week that additional rate cuts may not be warranted, and notably mentioned that policymakers discussed potential tightening scenarios if rates require adjustment upward. This firm positioning contrasts sharply with the prevailing dovish expectations in other major economies.

USD Weakness and Fed Rate Cut Expectations Create Crosscurrents

The US Dollar Index (DXY), measuring the Greenback’s strength against a basket of currencies, trades near its lowest level since October 7, as markets increasingly price in multiple interest rate cuts from the Federal Reserve. The anticipation of a more dovish Fed leadership following Jerome Powell’s tenure has further weakened USD demand. This dynamic provides underlying support to the AUD/USD pair, even as the Australian currency battles other headwinds—highlighting the tension between AUD weakness and USD vulnerability that keeps the pair range-bound. For perspective, 10 AUD to USD currently translates to roughly 6.63 USD.

Market Hesitation Ahead of US Jobs Report

Market participants are demonstrating clear reluctance to take aggressive directional positions before this week’s crucial macroeconomic releases, particularly the delayed October Nonfarm Payrolls (NFP) report for the United States. This data dependency suggests that substantial follow-through selling would be necessary to confirm that the AUD/USD pair’s three-week rally has truly exhausted itself, leaving the pair vulnerable to both downside surprises and potential rebounds depending on the NFP outcome.