AUD/USD Weakens for Fourth Consecutive Session; Support Emerges Ahead of Delayed October NFP Release

The Australian Dollar struggled against its US counterpart for the fourth straight trading day, trading near 0.6630 levels—representing a modest decline of 0.10% during Asia-Pacific hours. This pullback reflects a confluence of headwinds affecting the currency pair, though meaningful downside appears constrained by opposing fundamental forces.

Multiple Pressures Weighing on the AUD

The AUD has faced considerable selling pressure stemming from several interconnected developments. Disappointing employment figures released from Australia last Thursday set a negative tone, while simultaneous concerns about China’s economic momentum—highlighted by weak macro releases on Monday—have intensified risk aversion. With China representing Australia’s largest trading partner, softness in the world’s second-largest economy typically dampens demand for cyclical assets like the Australian Dollar. Additionally, a broader retreat across global equities has reinforced the bearish sentiment, as investors flee toward perceived safer havens.

RBA’s Hawkish Messaging Provides a Floor

Despite these headwinds, the Australian Dollar has not declined sharply, thanks largely to the Reserve Bank of Australia’s relatively firm policy stance. Recent comments from RBA Governor Michele Bullock suggested that the current rate environment may be appropriate, with no further easing necessary in the near term. More notably, the Board reportedly discussed contingencies should inflation or other factors necessitate rate increases—a hawkish signal that stands in contrast to Fed expectations. This divergence in monetary policy trajectories between the RBA and the Federal Reserve has acted as a stabilizing force for the currency pair.

US Dollar Weakness Offers Additional Support

Concurrently, the US Dollar Index (DXY) has languished near its lowest point since early October, reflecting elevated expectations for additional rate cuts from the Federal Reserve. Market participants are pricing in a more dovish Fed path, particularly with uncertainty surrounding Jerome Powell’s successor. This USD weakness has provided technical support to the AUD/USD pair, partially offsetting the damage from risk-off sentiment and Chinese economic concerns.

Market Caution Ahead of NFP Data

Looking forward, traders appear hesitant to establish aggressive positions before this week’s crucial economic data releases, most notably October’s Nonfarm Payrolls (NFP) report—which has been delayed. This data scarcity is encouraging market participants to adopt a wait-and-see approach, limiting the potential for sharp directional moves in either direction. For context, movements from 15 AUD to USD levels historically trigger significant repricing across the currency complex, suggesting traders are being particularly defensive given current macro uncertainty.

Outlook: Consolidation Expected

Until concrete evidence emerges of sustained selling pressure breaking through current support levels, the three-week-old recovery in AUD/USD may continue grinding sideways. The true test will come once the NFP report finally arrives, providing fresh directional cues for risk sentiment and Fed rate expectations. Until then, the pair appears likely to remain range-bound, with downside capped by RBA-Fed policy divergence and USD structural weakness.