On May 15, focus shifts to the upcoming Aussie labor market data, potentially affecting AUD/USD trends. Economists forecast a steady unemployment rate at 4.1% in April. Additionally, economists expect full employment to rise, signaling a robust labor market.
Tighter labor market conditions could spur wage growth and consumer spending, potentially fueling inflation. A higher inflation outlook may ease bets on multiple 2025 RBA rate cuts and support Aussie dollar demand. Conversely, rising unemployment and falling full employment may support a more dovish RBA stance, weighing on the Aussie dollar.
Shane Oliver, Head of Investment Strategy and Chief Economist at AMP, remarked on the potential RBA rate path after the US-China trade war truce, stating:
Aussie Dollar Daily Outlook: Fed Commentary to Steer US-Aussie Yield Differentials
Later today, Fed speakers may influence cross-currency rate dynamics. Hawkish Fed cues, signaling a near-term hold on policy moves, could widen the rate differential in favor of the US dollar, sending the AUD/USD pair below the 200-day EMA toward the 0.63623 support level and the 50-day EMA.
However, rising support for a June Fed rate cut may narrow the rate differential, favoring the Aussie dollar. A more dovish Fed stance could drive AUD/USD toward $0.65144.
