Australian Dollar Slides After Mixed Jobs Report as US Dollar Strengthens on Retail Sales Beat

April 17, 2025 – DailyForex.pk
The Australian Dollar (AUD) weakened against the US Dollar (USD) on Thursday, ending a six-day winning streak, as softer-than-expected employment data weighed on sentiment. The AUD/USD pair is currently trading near 0.6360, down from recent highs, as markets assess the latest macroeconomic indicators from both countries.

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📉 Australia’s Jobs Report Misses Expectations

The March Employment Change came in at +32.2K, falling short of the 40K consensus forecast. Meanwhile, the unemployment rate ticked higher to 4.1%, just below the projected 4.2%. While still historically low, the uptick added pressure on the Aussie.

Despite the setback, the AUD received mild support from improving global risk sentiment after U.S. President Donald Trump announced tariff exemptions for several tech products—many of which are manufactured in China, Australia’s largest trading partner.

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🏦 RBA Policy Uncertainty Limits AUD Upside

Minutes from the Reserve Bank of Australia (RBA) April policy meeting revealed growing uncertainty around the timing of the next interest rate decision. While a May rate cut remains on the table, policymakers are hesitant to commit, reflecting concerns over domestic data and global headwinds.

Markets are currently pricing in a 25-basis point rate cut in May, with nearly 120 basis points of easing expected over the next 12 months.

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💵 US Dollar Strengthens on Strong Retail Sales and Hawkish Fed Tone

The U.S. Dollar Index (DXY) is trading near 99.60, lifted by stronger-than-expected consumer spending. Key highlights include:

• Retail Sales rose 1.4% in March, beating the 1.3% estimate
• CPI inflation eased to 2.4% YoY, below the 2.6% forecast
• Core CPI slowed to 2.8% YoY from 3.1%
• Atlanta Fed’s Bostic reaffirmed that the Fed remains far from its 2% inflation target

Despite the inflation cooldown, hawkish Fed comments continue to support the dollar, reducing expectations of near-term interest rate cuts.

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🌏 China’s Economic Growth Supports AUD Stability

Australia’s economic outlook remains tied to China, and recent data was mostly positive:

• Q1 GDP: +5.4% YoY (vs. 5.1% forecast)
• Retail Sales: +5.9% YoY (vs. 4.2% expected)
• Industrial Production: +7.7% YoY (vs. 5.6% forecast)

Stronger Chinese data helps support commodity demand, indirectly offering a buffer for the AUD despite local economic headwinds.

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📊 Technical Analysis: AUD/USD Tests Key Support at 0.6350

• The pair is holding just above 0.6350, testing short-term support
• AUD/USD remains above the 9-day EMA (~0.6285), preserving a slight bullish bias
• The 14-day RSI remains above 50, suggesting neutral to positive momentum

Key resistance levels:

• 0.6400 (psychological)
• 0.6408 (February 21 high)

Key support levels:

• 0.6285 (9-day EMA)
• 0.5914 and 0.5900 (March 2020 low and psychological barrier)

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📌 Conclusion: AUD/USD Faces Crosswinds From Domestic Data and US Strength

While global risk sentiment and strong Chinese data offer some tailwinds, soft employment figures and uncertainty from the RBA are keeping the Australian Dollar on the defensive. With the US Dollar strengthening on solid economic indicators, the AUD/USD pair could remain under pressure unless domestic data surprises to the upside.

📉 For daily AUD/USD forecasts, macroeconomic news, and central bank updates, visit www.dailyforex.pk — Pakistan’s trusted source for forex market insights.