AUD/USD advances to near 0.6580 during Thursday’s European session, marking its highest level in nearly two weeks. The Australian Dollar gains momentum after solid October labour market figures surprised to the upside.
Australia added 42.2K new jobs in October, more than double the expected 20K and well above the previous 12.8K. The Unemployment Rate improved to 4.3%, compared to forecasts of 4.4% and the prior 4.5%.
Firm labour market conditions are reducing expectations for additional rate cuts from the Reserve Bank of Australia (RBA). The central bank has already lowered the Official Cash Rate (OCR) by 75 bps this year, bringing it to 3.6%.
Meanwhile, the US Dollar weakens as expectations grow for another Federal Reserve rate cut in 2024. The US Dollar Index (DXY) slips to around 99.30, its lowest level in almost two weeks.
FedWatch data shows a 67% chance of a 25 bps rate cut at the December meeting, which would mark the Fed’s third consecutive reduction.
