Australian dollar climbs on risk-on mood following lower US job data announced on Friday.

On Monday, the Australian Dollar (AUD) extended its winning streak for the fourth consecutive session. Boosted by hawkish attitude toward the Reserve Bank of Australia (RBA). This optimism strengthens the Australian dollar, supporting the AUDUSD pair.

The Australian central bank is expected to keep the cash rate at 4.35%, a 12-year high. At its forthcoming meeting on Tuesday. But there are expectations. that it may adopt a moderate tightening bias. Particularly following last week’s higher-than-expected inflation figures, according to The Australian Financial Review.

The US Dollar Index (DXY), which measures the performance of the US Dollar (USD). Against six major currencies, is under pressure following softer-than-expected US job data announced on Friday. This move rekindled optimism for interest rate decreases from the US Federal Reserve (Fed) later this year. The existing risk appetite may persist this week, given Fed Chair Jerome Powell’s rather dovish position on the monetary policy outlook during Wednesday’s session.

The Australian dollar benefited from the hawkish attitude surrounding the RBA.

The Australian dollar rose against the backdrop of a hawkish RBA. The University of Melbourne’s TD Securities Inflation (YoY) fell to 3.7% in April, down from 3.8% in March. Meanwhile, the monthly interest rate stayed unchanged at 0.1%.

The Nonfarm Payrolls report showed fewer jobs added than expected in April, indicating a significant slowdown from March’s number.

Nonfarm Payrolls data released on Friday indicated that the US economy added 175,000 jobs in April, less than the projected 243,000 and a sharp deceleration from March’s 315,000 job gains.
The Judo Bank Australia Composite Purchasing Managers Index (PMI) fell in April, reflecting a little slower increase in Australian private sector output. Business activity grew mostly in the service sector, while manufacturing production decreased.
Analysts at Commonwealth Bank and Westpac predict that the RBA’s interest rate will peak at 4.35% in November 2023 before falling to 3.10% in December 2025.
Australia’s central bank is set to keep the key policy rate at 4.35% for the fourth consecutive meeting on Tuesday, and possibly until the end of September, according to a Reuters survey of economists. These experts expect only one interest rate drop this year.
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, remarked on the April labor market data, telling Bloomberg TV that it was healthy. Goolsbee stressed the necessity for the Fed to determine whether it is still dedicated to lowering inflation. He said that if the Fed maintains a restrictive position for too long, it would have to examine the employment component of its mandate.
According to the CME FedWatch Tool, the probability that the Federal Reserve will maintain interest rates in their present range of 5.25%-5.50% during the June meeting has grown to