AUD/USD climbs firmly above 0.6300 as DXY surrenders recovery, Aussie job data eyed

• AUD/USD has soared to near 0.6320 as the risk-on impulse has strengthened further.
• The DXY has surrendered the cushion of 112.00 and is exposed to further weakness.
• Risks from global and domestic demand were responsible for a less-hawkish RBA policy.

The AUD/USD pair has sensed a fresh buying interest from around 0.6280 and has reclaimed the round-level resistance of 0.6300 firmly. The aussie bulls have been underpinned amid a short-lived pullback in the US dollar index (DXY). The pullback move in the DXY terminated around 112.25 and the asset revisited below the round-level cushion of 112.00.

The risk-on profile has strengthened as investors have shrugged off pessimism. Meanwhile, S&P500 futures have accelerated significantly.

In early Tokyo, the release of the Reserve Bank of Australia (RBA) minutes brought a slight fall in the asset. The minutes clarify that the central bank trimmed the pace of the rate hike to 25 basis points (bps) to safeguard the economy from shocks of domestic and global subdued demand. Also, the central bank has already pushed interest rates firmly in a short period of time.

On economic prospects, RBA policymakers stated that headline inflation has shown exhaustion signals due to a fall in oil prices while the core Consumer Price Index (CPI) is still solid due to escalating prices for services. The administration has achieved a jobless rate of 3.5%, the lowest in the past 50 years.

Meanwhile, hawkish commentary from Michele Bullock, who is the Assistant Governor (Financial System) at the RBA, has spoken today and said the central bank is looking to raise interest rates further over the coming months, adding the bank can achieve a similar rise in rates to its global peers through smaller hikes.

This week, the Australian employment data will hog the limelight. As per the preliminary estimates, the Employment Change will drop to 25k vs. the prior release of 33.5k. While the Unemployment Rate will remain steady at 3.5%.