Audusd declines as mixed US data contrasts with strong Australian employment figures

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.38%	-24.3 Pips
Week to-date	-0.12%	-8 Pips
May	0.05%	3.1 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

The economic data for the United States in April and May 2025 reflect a mixed picture of the country’s manufacturing and consumer engagement sectors. U.S. Industrial Production for April shifted from negative to neutral at 0%, indicating a stabilization in production activities. However, the Retail Trade Control Group saw a decline from 0.5% in March to -0.2% in April, suggesting reduced consumer spending. The New York Empire State Manufacturing Index further decreased, indicating worsening sentiment in the state’s manufacturing sector. The Producer Price Index (PPI) both monthly and annually showed a decline, emphasizing lower wholesale inflation. Despite some negative data, the Philadelphia Fed’s Manufacturing Business Outlook Survey showed an improvement in May, indicating a possible rebound in manufacturing sentiment. Initial Unemployment Insurance Claims slightly rose, and the Monthly Retail Trade (excluding autos) declined, maintaining pressure on the labor market and consumer sectors.

In Australia, the economic data for April 2025 presents a brighter scenario. Employment figures are robust, with part-time and full-time employment seeing considerable increases, contributing significantly to the overall employment change which rose to 89K. The participation rate also rose, indicating more individuals entering the workforce. Meanwhile, the unemployment rate remained steady at 4.1%, suggesting a stable job market. Although consumer inflation expectations lowered slightly, the Wage Price Index increased, signifying rising wages potentially boosting consumer spending power. Overall, the Australian labor market appears solid, with positive momentum in employment growth.

The recent developments in economic indicators profoundly impact the AUDUSD exchange rate. The combination of mixed U.S. economic data, particularly the decline in retail trade and producer prices, and the strengthening Australian labor market, exerted downward pressure on the AUDUSD pair, causing it to drop by -0.38% to 0.64035. The robust Australian employment figures signal a stronger economy, supporting the Australian dollar, whereas the softer U.S. data, particularly in consumer spending and manufacturing sentiment, undermine the U.S. dollar. The contrasting economic outlooks have led to a relative devaluation of the Aussie dollar against its U.S. counterpart, with a potential for further volatility contingent on future economic developments and market sentiment.

Latest from X (Twitter)

Tweets by Australian Bureau of Statistics

What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.38% to 0.64035. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 0.63765 with break below could see further selling pressure towards S2 at 0.63495. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.64575 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.63900 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

#AUDUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#AUDUSD” num=3 showheader=false]