AUD/USD dips back under 0.7500, remains well within recent ranges as focus turns to US NFP

• AUD/USD dipped back under 0.7500 but remains well within this week’s ranges as focus shifts to Friday’s US jobs data.
• The Aussie remains resilient against the backdrop of “structurally” higher commodity prices and expectations for a hawkish RBA policy shift.

AUD/USD dipped back to the south of the 0.7500 level on Thursday, though remains robustly supported near the big figure and well within this week’s approximate 0.7460-0.7540ish ranges. The pair was little moved by the latest batch of US data which saw inflation (according to the Core PCE Price Index) rise again in February and further evidence of a robust labour market one day ahead of the release of the official US jobs report. Despite the data and Fed rhetoric this week supporting the Fed’s recent hawkish shift in stance this week, month/quarter-end selling means the buck has had a tough time.

As a result, AUD/USD has been able to hold near the 0.7500 level this week, with the short-term bulls eyeing a test of Q4 2021 highs in the 0.7560 area. The Australian economy’s geographical removal from the war in Ukraine and positive exposure to the resultant sharp recent rise in commodity prices has been a key tailwind for the Aussie as of late, analysts argued. “If we are right the war leads to a structural increase in energy prices, there is more upside to AUD this year,” said currency strategists at CBA. “We expect AUD/USD will soon break above its resistance near $0.7516 and lift higher to $0.7673,” they continued.

Such a move may have to wait until after Friday’s official US jobs report, with trading conditions ahead of this key data release normally non-committal. In the meantime, recent strong Australian data should keep the pair support above this week’s mid-0.7400 lows. For reference, new homes building approvals surging a massive 43.5% MoM in February, more than recovering January’s 27.1% MoM drop, while data showed job vacancies rose 6.9% in the quarter to February to hit a record 423,500. Recent data underpins expectations that RBA will soon catch up with many of its other G10 central bank peers by announcing a hawkish policy shift.