AUD/USD experiences a decline, settling at approximately 0.6885 during the early hours of Monday’s Asian session. In March, Nonfarm Payrolls saw an increase of 178K, surpassing expectations. Westpac analysts project three more rate increases in 2026 as a measure to address inflationary pressures. The AUD/USD pair continues its downward trend, approaching 0.6885 in the early Asian session on Monday. The US Dollar exhibits strength against the Australian Dollar following robust US employment data and persistent geopolitical tensions in the Middle East.
The upcoming release of the US March ISM Services Purchasing Managers Index data is set to be a focal point later on Monday. On Friday, data indicated that the US Nonfarm Payrolls increased by 178K in March. This figure came after a decline of 133K (revised from -92K) and significantly exceeded market expectations, which were set at a gain of 60K. The Unemployment Rate decreased to 4.3% in March, down from 4.4% in February.
On Sunday, US President Trump intensified his warnings regarding potential bombings of Iranian power plants, set to commence on Tuesday, vowing to unleash “Hell” upon the nation following the successful rescue of an airman from Iran, over a day after his fighter jet was downed. Rising tensions between the US and Iran, along with worries about the potential closure of the Strait of Hormuz, are contributing to the strengthening of a safe-haven currency like the Greenback, presenting challenges for the pair in the short term.
Market expectations for the May meeting suggest a likelihood of another rate hike, influenced by increasing oil prices and a constrained labor market. Westpac analysts anticipate that the Reserve Bank of Australia will implement three additional rate increases in 2026. The cash rate would rise to 4.85%, a figure last observed in November 2008.