• Upbeat Aussie Employment data strengthens case for RBA to maintain its current interest rate policy.
• Aussie shows little reaction to PBoC's decision to leave interest rates unchanged.
• Fed dovish bets might limit the downside.

The AUD/USD declined by 0.40% to 0.6790 in Friday's session, pressured by growing expectations of interest rate cuts by the Federal Reserve (Fed). The Fed's focus on preventing labor market deterioration has led traders to anticipate a 75-basis-point (bps) decrease in the remaining two Fed policy meetings. The Australian Dollar remained stable despite the People's Bank of China's (PBoC) decision to maintain interest rates unchanged.

Despite the mixed Australian economic outlook, the Reserve Bank of Australia's (RBA) hawkish stance on inflation has led to market expectations of a modest 25-basis-point rate cut in 2024. This signals a shift away from the previously anticipated more aggressive easing cycle due to the persistent inflationary pressures.