AUD/USD rebounds from 0.6300 as US Dollar corrects sharply ahead of Powell’s speech

• AUD/USD finds support near 0.6300 amid correction in the US Dollar.
• Investors seem mixed about guidance from Fed Powell on interest rates.
• The Australian Dollar faced selling pressure as labor demand remained weak in September.

The AUD/USD pair discovers the buyer’s interest near the round-level support of 0.6300. The Aussie asst rebounds as the US Dollar faces a sell-off ahead of the speech from Federal Reserve (Fed) Chair Jerome Powell. The US Dollar Index (DXY) drops sharply to near 106.30.

Investors seem mixed about whether Fed Powell will choose a hawkish guidance due to robust labor market conditions, strong consumer spending and reviving factory activities or will support neutral interest rates due to rising US Treasury yields. The 10-year US Treasury yields have risen to near 4.94%.

The S&P500 struggles to hold gains generated at open as the broader market sentiment is cautious due to escalating Israel-Palestine conflicts. On Wednesday, US President Joe Biden said ‘loud and clear’ that the US stands with Israel and is ready to deliver whatever the nation needs to defend itself against the Hamas military.

Meanwhile, the Australian Dollar faced pressure early Thursday after mixed Employment data. Recruitment of a mere 6.7K individuals in September indicates that labor demand was weak. Economists forecasted fresh additions of 20K, which were significantly lower than the August reading of 63.3K. While the Unemployment Rate dropped to 3.6%, against the estimates and the former release of 3.7%.

Going forward, the Australian Dollar will dance to the tunes of the interest rate decision by the People’s Bank of China (PBoC), which will be announced on Friday. Being a proxy to China’s economy, a dovish decision would strengthen the Australian Dollar.