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Turning to AUD/USD, Australia’s real estate sector is in focus. Building permits fell 0.3% month-on-month in February after soaring 6.3% in January.
Weaker demand for new homes could potentially pressure house prices. Falling home prices may adversely affect consumer confidence and spending, dampening demand-driven inflation. A softer inflation outlook could boost bets on an H1 2025 RBA rate cut, impacting Aussie dollar demand.
Shane Oliver, Head of Investment Strategy and Chief Economist at AMP, commented on the RBA’s interest rate decision and timing of a potential rate cut, stating:
Australian Dollar Daily Outlook: US Labor Market and Tariffs in Focus
During the US session, hotter-than-expected labor market data could dampen expectations for multiple Fed rate cuts. A less dovish Fed rate path could widen the US-Aussie interest rate differential in favor of the US dollar. In this scenario, the AUD/USD could fall toward $0.62500.
Conversely, softer labor market data may fuel concerns about the US economy, signaling a more dovish Fed rate path. A narrower rate differential could push the AUD/USD pair above the 50-day EMA , potentially targeting the $0.63623 resistance level.
However, tariff developments could overshadow the data. Escalating trade tensions could fuel risk-off sentiment, driving US dollar demand and weighing heavily on AUD/USD. Risk aversion could drag the AUD/USD pair below $0.62500.
