AUD to USD Forecast: Aussie Employment Numbers and the RBA Rate Path

Australian Consumer Confidence, Labor Market Data, and the RBA

Australian consumer confidence figures influence buyer demand for the AUD/USD early in the Thursday (June 13) session.

Economists forecast the Westpac Consumer Confidence Index to decline by 0.1% to 82.0.

Downward trends in consumer confidence could affect consumer spending and dampen demand-driven inflation. A softer inflation outlook could enable the RBA to begin discussions about rate cuts.

However, Australian labor market data will likely impact the AUD/USD more.

Economists forecast full-time employment to increase by 25,000 in May after falling by 6,100 in April. Furthermore, economists expect the unemployment rate to fall from 4.1% to 4.0%.

Tighter labor market conditions could support wage growth and increase disposable income. Upward trends in disposable income may fuel consumer spending and demand-driven inflation.

The likely effects of labor market data on the inflation outlook could influence the RBA rate path more than the consumer confidence figures.

Better-than-expected labor market data may reduce investor expectations of a 2024 RBA rate cut.

US Economic Calendar: Producer Prices, Jobless Claims, and Fed Speakers

Later in the session on Thursday, monthly US producer prices and weekly jobless claims will garner investor interest.

Economists forecast producer prices to increase by 0.1% in May after rising by 0.5% in April. Additionally, economists expect core producer prices to advance by 0.3% after an increase of 0.5% in April.

Softer-than-expected numbers could raise investor bets on a September Fed rate cut. Producers reduce prices in a waning demand environment, affecting consumer price trends.

A lower demand-driven inflation outlook could allow the Fed to cut interest rates to ensure price stability.

Moreover, economists predict initial jobless claims to increase from 225,000 to 229,000 in the week ending June 8. A larger-than-expected increase in jobless claims could further increase investor expectations of a September Fed rate cut.

Weaker labor market conditions could affect wage growth and reduce disposable income. Downward trends in disposable income may impact consumer spending and dampen demand-driven inflation.

Beyond the numbers, investors should monitor FOMC member commentary. Fed Vice Chair John Williams is on the calendar to speak. Views regarding inflation, the economic outlook, and the Fed rate path could move the dial.

Short-Term Forecast

Near-term AUD/USD trends will hinge on the labor market data and US producer prices. Softer-than-expected US producer prices and weaker labor market conditions could tilt monetary policy divergence toward the Aussie dollar. However, Australian labor market numbers must align with, or be better than forecasts, to support buyer appetite for the Aussie dollar.

AUD/USD Price Action

Daily Chart

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

An Aussie dollar break above the $0.67003 resistance level could signal a climb toward the $0.67500 handle. A breakout from the $0.67500 handle would bring the $0.67967 resistance level into play.

Australian employment, US producer prices, US jobless claims, and FOMC member commentary require consideration.

Conversely, an AUD/USD drop below the $0.66500 handle could give the bears a run at the 50-day EMA.

With a 14-period Daily RSI reading of 55.34, the AUD could return to the $0.67500 handle before entering overbought territory.