Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

AUD/USD climbs on US data, eyes RBA minutes amid job market concerns

The Australian dollar gains against a softer US dollar, navigating through mixed economic cues and awaiting crucial RBA insights and wage data amidst growing speculation on interest rate adjustments.

Source: Bloomberg

Last week saw a second straight week of gains for the AUD/USD - a beneficiary of the greenback weakness, that followed softer-than-expected US retail sales data and hotter-than-expected US CPI and PPI data.

The rally in the AUD/USD came despite a softer-than-expected Australian jobs report, as the unemployment rate surged to a two-year high at 4.1.% While the ABS suggested the weakness was a result of changing seasonal dynamics, we think it reinforces the underlying trend of cooling in the labour market. Therefore, increasing the chance of RBA rate cuts in the second half of the year.

This week's critical local economic events for the AUD/USD are Tuesday's RBA meeting minutes, previewed below, and wages data on Wednesday, expected to increase by 0.9% in the quarter and 4.1% annually.

What is expected from this week's RBA meeting minutes (Tuesday, 22 February at 11.30am)

The minutes from the Reserve Bank of Australia’s February meeting are scheduled to be released on Tuesday, 22 February at 11.30am.

At its board meeting in February, the RBA kept its official cash rate on hold at 4.35%, as widely expected. The RBA noted that higher interest rates were working to reduce inflation, and to achieve a better balance between supply and demand.

"Higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy.

The RBA confirmed that it remains data-dependent and retained a weak tightening bias.

"The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out. "

The minutes will be closely scrutinised around what options the RBA board considered at the February meeting, the factors that would prompt the RBA to act on its tightening bias in 2024, and any clues about what might see the bank offer a more neutral bias.

RBA cash rate chart

Source: RBA

AUD/USD technical analysis

Recently, we have been looking for the AUD/USD to stabilise and move higher based on the idea that the pullback from the December .6871 high is part of a correction rather than a reversal lower.

However, last week's break below .6500c, to Tuesday’s .6442 low has created a degree of technical damage and cast doubt over this interpretation. While the AUD/USD remains below the .6540/65 resistance zone, which includes the 200-day moving average, the risks are for a retest of .6442 low with scope to a lower band of support at .6400/.6380.

Aware that a sustained move above the .6540/65 resistance zone would negate the downside risks and open the way for a stronger recovery towards initial resistance at .6620/30 before .6700c.

AUD/USD daily chart

Source: TradingView
  • Source:TradingView. The figures stated are as of 19 February 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.