AUD/USD bounces while the US dollar falls due to weak employment and ISM data

  • The Aud/USD advances about 0.6500, recovering the losses of Tuesday as the US dollar weakens.
  • Weak US data press the dollar, with the ADP jobs and the ISM services PMI both below the forecasts.
  • The Australian GDP slows down at 0.2% intertrmetral in the first quarter, while PMI data indicate a slow business activity.

The Australian dollar (AUD) can be seen against the US dollar (USD) on Wednesday, ignoring the weakest domestic GDP data, since the dollar is removed after disappointing employment figures and the PMI of services of the US ISM.

The Aud/USD torque fell previously on Wednesday after the publication of weaker Australian GDP data, but buyers intervened near the 0.6450 support – the lower limit of their recent negotiation range – causing a rebound. At the time of writing, the torque advances towards 0.6500, around near Tuesday and recovering all the losses of the previous day. However, the bullish potential remains limited by the 0.6500 psychological brand, which has acted as a firm resistance in recent sessions.

The US dollar was under renewed pressure as new data painted a weaker image of the world’s largest economy. The ADP employment change report showed that private companies added only 37,000 jobs in May, the lowest figure since March 2023 and well below the expected increase of 115,000. The April figure was also checked to 60,000 from 62,000, pointing out a clear loss of impulse in hiring. Meanwhile, the ISM services PMI fell to the territory of contraction, going down to 49.9 from 51.6 in April, in front of a forecast of 52. The report marked the first contraction in the US services sector this year. As a result, the American dollar index (DXY), which follows the dollar against a basket of main pairs, fell from Tuesday’s maximum about 99.00 to around 98.85 at the time of writing.

Although the weak US data weighed on the dollar, the Australian dollar found limited support in local foundations, which also pointed to signs of deceleration of the impulse. The economy grew only 0.2% intertrmetral, below 0.6% in the previous quarter and without complying with 0.4% expectations. Although this marked the fourteenth consecutive trimester of expansion, it was the weakest rhythm in three quarters. Meanwhile, the PMI composed of S&P Global Australia fell to 50.5 in May from 50.6 in April, indicating only a marginal growth. The PMI of Services rose to 50.6 in May from 50.5 in April, indicating a slight improvement in the activity of the services sector.

Looking ahead, operators will focus their attention on the data of the Australian commercial balance that will be published on Thursday, followed by the highly anticipated report of Non -Agricultural Payroll (NFP) of the USA on Friday. Both publications could inject new volatility in the AUD/USD torque, especially if US labor market data reinforces the expectations of a policy change by the Federal Reserve.

Economic indicator

Commercial balance

This index published by the Australian Bureau of Statistics It shows the difference between exports and imports of Australian goods. Exports can offer a reflection of the growth of the Australian economy, while imports induction the state of domestic consumption. Thus, the trade balance offers an early reading of the net state of exports and the domestic market. A positive reading is seen as a bullish for the Australian dollar, while a negative figure is bassist for the currency.


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Next publication:
PLAY JUN 05, 2025 01:30

Frequency:
Monthly

Dear:
6,100m

Previous:
6,900m

Fountain:

Australian Bureau of Statistics

Source: Fx Street

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