The US dollar has depreciated approximately 1.5 per cent since Friday, triggered by a disappointing July non-farm payrolls report which indicated an addition of only 73,000 jobs. According to Commonwealth Bank analyst Kristina Clifton in her recent FX strategy note, the impact was intensified by a significant downward revision of 258,000 jobs to the figures from the previous two months. Additionally, the unemployment rate saw an increase to 4.2 per cent.
The market’s response heightened over the weekend following accusations from President Trump, who alleged that the Bureau of Labor Statistics had manipulated the data for political gain, leading to the dismissal of its director. Clifton suggests that such political intervention could erode trust in official US economic data, potentially diminishing the US dollar’s attractiveness as a safe haven asset.
Commonwealth Bank anticipates that the Australian dollar will experience a moderate increase, potentially reaching US65.12¢ this week. This forecast is based on the expectation of reduced global economic uncertainty, particularly if there is a decrease in tariff-related tensions.
Furthermore, broader strength in the AUD is projected across major currency pairs, including the euro, New Zealand dollar, and Japanese yen. This is underpinned by an improved risk sentiment. Commonwealth Bank (CBA) is a multinational bank operating in Australia, New Zealand and Asia. It provides a variety of financial services, including retail, business and institutional banking, funds management, superannuation, insurance, and investment services.
