Australian Dollar Slips Towards 0.6850 as US Jobs Data Show Strength

• Near 0.6860, AUD/USD edges lower in early Asian trading on Monday.
• October’s US NFP increase of 165,000 exceeded the market consensus.
• Last week’s RBA increase took the OCR to an 18-year high.

Better-than-forecast US employment figures lend some support to the US Dollar (USD) against the Australian Dollar (AUD), leaving AUD/USD slightly lower at around 0.6860 in Monday’s early Asian session. Attention now turns to China’s Consumer Price Index (CPI) inflation report, due later in the day.

October’s Nonfarm Payrolls (NFP) increased by 165,000, well above the 65,000 expected by the market, according to Friday’s release from the US Bureau of Labor Statistics (BLS). September’s gain was revised from 29,000 to 60,000. The Unemployment Rate also fell, reaching 4.1% in October after 4.2% in September.

The probability of another quarter percentage point rate rise at December’s policy meeting climbed to 79.6% as traders increased their bets, according to the CME FedWatch tool. The indicator nevertheless suggested just one additional increase beyond that.

In Australia, the Reserve Bank of Australia (RBA) raised the Official Cash Rate (OCR) from 4.60% to 4.85%, an increase of 25 basis points (bps). The decision brought the cash rate to its highest level since 2008.

Inflation remains elevated and is expected to stay that way for much of 2027, the Australian central bank said in its monetary policy statement. Treasurer Jim Chalmers acknowledged that, to help reduce inflation, the government "has more work to do".

Aussie falls as risk assets sell off and concerns over RBA credibility grow

An overnight trading range of “0.6862 - 0.6954 overnight range,” was highlighted by strategists at Societe Generale, who described AUD/USD spot as “skid[ding] below 0.69 for first time since early July” and “on track for lowest weekly close since January.” Their nearby technical levels are “support 0.6865, resistance 0.7080,” while policy concerns have added to the pressure following Hauser’s warning that he “warns public confidence in ability of RBA to counter inflation is at risk.” Societe Generale also points to the broader impact of falling equities, noting that “FX spillovers from the selloff in stocks surfaced in the AUD, the SEK and NZD in G10,” and that “the KRW and MXN rank among the worst performers in EM.”

Daly signals further tightening as robust jobs figures keep inflation in the Fed’s sights

An FXS Speechtracker score of 8/10, against an established baseline of 6.4/10, marked a notably more hawkish tone from the Fed’s Daly. Although she described the jobs report as “good news” and said wage growth “isn’t booming,” she stressed that “real wages are falling”. Her insistence that inflation has been “high for too long” and must remain the “number 1 priority” supports a bias towards further rate increases. Policy “will have to tighten further,” she said, with the robust labour market providing “latitude” for the Fed to proceed in a “deliberate”, data-dependent way. Taken together, the remarks point towards the risk of additional tightening, with little concern about a marked slowdown in growth, alongside some recognition that AI-related repricing and cooling demand could modestly restrain activity.

A 0.95-point increase brought the FXS Fed Sentiment Index to 143.10, keeping it firmly in hawkish territory and aligning with the above-baseline FXS Speechtracker score. The rise suggests markets should view Daly’s comments as incrementally hawkish for the Dollar, with the heightened likelihood of further policy tightening still central to the outlook.

Technical Analysis: AUD/USD remains bearish below the 100-day SMA

With spot below every key moving average and the full Bollinger envelope, the daily chart shows AUD/USD continuing to decline with a distinctly bearish bias. Upside is capped by both the Bollinger Bands’ 20-period simple moving average (SMA) and the 100-day SMA. Meanwhile, a Relative Strength Index (14) reading near 33 points to persistent selling pressure, although it is nearing oversold territory.

The lower Bollinger Band, around 0.6875, provides the first resistance on any recovery. Beyond that, the Bollinger midline at 0.6985 is the next obstacle, followed by the 100-day SMA near 0.7025 and the upper Bollinger Band at 0.7090. This framework offers no significant support levels beneath the current price. A sustained recovery above 0.6875 would therefore be the first indication that sellers are loosening their immediate grip; without it, further declines remain possible.

(The technical analysis of this story was written with the help of an AI tool. Know more.)