AUD to USD Forecast: Aussie Dollar’s Fate Hinges on Trade and Housing Data

Australian Trade Terms, the Real Estate Sector, and the RBA

On Thursday (June 6), Australian trade data will impact buyer demand for the AUD/USD.

Economists forecast the Australian trade surplus to widen from A$5.024 billion to A$5.500 billion in April. Furthermore, economists expect exports to rise by 0.4% and imports to increase by 3.7%.

Better-than-expected trade terms could influence the RBA interest rate trajectory. Australia has a trade-to-GDP ratio of over 50%, with 20% of its workforce in trade-related jobs.

Recent Caixin private sector PMIs from China signaled an improving macroeconomic environment. A pickup in trade activity could allow the RBA staff to raise its growth forecasts and support a more hawkish RBA rate path.

However, Australian housing sector data also needs consideration. Tight housing market conditions influence rent trends, which fuel demand-driven inflationary pressures. Weaker housing sector data could dampen inflationary pressures and fuel speculation about a 2024 RBA rate cut.

Economists forecast home loans to increase by 2.2% in April after rising by 2.8% in March. Additionally, economists expect building permits to fall by 0.3% after a 1.9% increase in March.

US Economic Calendar: US Labor Market and the Fed Rate Path

Later in the Thursday session, US initial jobless claims will attract investor attention.

Economists forecast initial jobless claims will increase from 219k to 220k in the week ending June 1.

An unexpected spike in initial jobless claims could raise investor bets on a September Fed rate cut. Weaker labor market conditions may affect wage growth, disposable income, and consumer confidence. Consumers could respond by curbing spending. Downward trends in consumer spending would dampen demand-driven inflationary pressures.

Other stats include finalized nonfarm productivity and unit labor cost figures for Q1 2024. However, the initial jobless claims may impact the AUD/USD pair more with the looming US Job Report to consider.

Short-Term Forecast

Near-term AUD/USD trends will hinge on the Aussie trade data and US labor market numbers. Weaker-than-expected US labor market data could drive investor bets on a September Fed rate cut. Rising expectations of a September Fed rate cut would tilt monetary policy divergence toward the Aussie dollar.

AUD/USD Price Action

Daily Chart

The AUD/USD remained comfortably above the 50-day and 200-day EMAs, confirming the bullish price trends.

An Aussie dollar break above the $0.67003 resistance level would support a move to the $0.67500 handle.

Investors should consider Australian trade data, real estate sector numbers, and US labor market data.

Conversely, an AUD/USD drop below the $0.66500 handle could give the bears a run at the 50-day EMA. A fall through the 50-day EMA may signal a further decline toward the 200-day EMA and the $0.65760 support level.

With a 14-period Daily RSI reading of 54.54, the AUD/USD could rise to the $0.67500 handle before entering overbought territory.