AUD/USD trades sideways above 0.6700 ahead of US data

• AUD/USD remains in a tight range above 0.6700 despite multiple tailwinds.
• A hawkish stance on interest rates from RBA’s Bullock fails to boost the Australian Dollar (AUD).
• Weak US JOLTS job openings data weigh heavily on the US Dollar.

The AUD/USD pair is trading in a tight range above the 0.6700 round-level support in the European session on Thursday. The Australian asset is finding no bids despite the weaker US Dollar (USD) and Reserve Bank of Australia (RBA) Governor Michele Bullock’s hawkish guidance on interest rates.

The Dollar Index (DXY), which tracks the value of the greenback against six major currencies, extended its decline below 101.20. The US Dollar faced selling pressure following the release of weak US JOLTS job openings data for July, which raised red flags about labor market conditions.

Speaking at the Anika Foundation in Thursday’s Asian session, Michele Bullock said, “If the economy broadly evolves as anticipated, the board does not expect to be in a position to cut rates in the near term.” Her comments reinforced market speculation that the RBA is unlikely to cut interest rates this year.

The Australian asset is consolidating as investors look for fresh clues on how much the Federal Reserve (Fed) will cut interest rates at its September meeting.

The Fed is widely anticipated to start cutting interest rates this month as downside risks to the US labor market have increased and progress in the disinflation process toward the bank’s 2% target remains intact. For significant clues on the likely size of the rate cut, investors are awaiting the US Non-Farm Payrolls (NFP) data for August, due on Friday.

In today’s session, investors will focus on the ADP employment change and the US ISM services PMI for August. Economists estimate that payrolls in the private sector rose by 145,000 from 122,000 in July. In the same period, activities in the services sector, which accounts for two-thirds of the economy, are expected to have grown at a slower pace of 51.1 from the previous reading of 51.4.