**AUD/USD Weekly Forecast: Cautious Fed Pressures Aussie, Investors Watch for NFP Data**
*Based on content by Kenny Fisher for Forex Crunch, with additional analysis.*
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The Australian dollar (AUD), in its pairing with the US dollar (USD), continues to face downward pressure as the week begins. The cautious stance of the Federal Reserve (Fed) and a shifting risk environment have made the AUD/USD pair vulnerable. Notably, market participants are focusing on the US Non-Farm Payrolls (NFP) report, a key event that could trigger substantial movements for the currency pair. This article provides a comprehensive breakdown of recent developments, fundamental drivers, and technical perspectives surrounding AUD/USD.
## Recap: What Drove the AUD/USD Pair Last Week?
The AUD/USD pair experienced a considerable decline over the previous week, falling from levels near 0.6530 to close below 0.6480. Several factors contributed to this movement:
– **Fed’s Dovish Tone but Cautious Stance:**
The Federal Open Market Committee (FOMC) maintained interest rates, signaling possible rate cuts in the pipeline. However, Fed Chair Jerome Powell emphasized data dependency, reiterating that persistent inflation could delay easing. Even as the Fed’s tone softened compared to prior months, growing doubts about imminent rate cuts buoyed the US dollar.
– **Australian Economic Releases:**
Australia’s domestic data was largely uninspiring. Retail sales remained tepid, underlining subdued consumer demand. The country’s inflation figures were mixed, showing some persistence but not enough to alter the Reserve Bank of Australia’s (RBA) cautious rate outlook.
– **Shifts in Risk Sentiment:**
Global risk sentiment remained fragile amid Middle East tensions and ongoing concerns over global growth. As risk appetite faded midweek, the US dollar—often seen as a safe-haven—attracted renewed buying pressure.
– **Weak Chinese Data:**
China’s Purchasing Managers Index (PMI) figures were weaker than expected, stoking fears of a slowdown in Australia’s largest trading partner. This added further downward pressure to the Australian currency.
## What to Watch: Upcoming Economic Events
Market attention is squarely on the upcoming US Non-Farm Payrolls (NFP) release. This event, along with several other key data points, could influence AUD/USD’s direction in the week ahead:
### United States
– **Non-Farm Payrolls (NFP, Friday):**
The headline event of the week, NFP measures the change in US employment. Market consensus expects a moderate addition of jobs, but previous surprises have caused significant USD volatility.
– **ISM Services PMI (Monday):**
The service sector is critical for the US economy. Strong readings may reinforce the case for Fed patience, boosting the US dollar.
– **Jobless Claims (Thursday):**
Initial and continuing claims figures are closely watched for trends in the labor market.
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