- AUD/USD finds support near 0.6300 amid US Dollar correction.
- US private payrolls halved in September to 89,000 from the August reading.
- The US ISM Services PMI came in at 53.6, as expected, but down from the previous release of 54.5.
The AUD/USD pair rebounds after remaining choppy near the round support level around 0.6300 in the early part of the New York session. The pair finds interest from buyers as market mood improves due to a correction in the US Dollar driven by weaker-than-expected employment change data, reported by Automatic Processing agency of Data (ADP).
The S&P 500 opens higher as risk aversion moderated as new US private payrolls in September halved to 89,000 from the August reading. Investors expected a decline in hiring to 153,000. The soft labor market data is expected to moderate expectations for a further increase in interest rates by the Federal Reserve (Fed) in the remainder of 2023.
On Tuesday, Cleveland Fed President Loretta Mester reiterated her hawkish stance on the outlook for interest rates. Mester said she is willing to raise interest rates further at the November policy meeting if the economy continues to hold up as it has. Weak labor market data is expected to force policymakers to return to a neutral stance.
The Dollar Index (DXY) corrects to around 106.60 following the weak employment data. Meanwhile, the Institute for Supply Management (ISM) reported services PMI data at 53.6, as expected, down from August’s reading of 54.5. The services PMI data has a significant impact on the Dollar Index, as it represents the services sector, which represents two-thirds of the US economy. New orders fell significantly to 51.8 from the previous release of 57.5.
As for the Australian dollar, the Reserve Bank of Australia’s (RBA) decision to keep interest rates unchanged has reduced its appeal. The RBA kept interest rates unchanged at 4.10% on Tuesday, despite a rebound in Australia’s monthly Consumer Price Index (CPI) to 5.2% in August due to a rise in oil prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
