AUDUSD surges to 0.6350 as US NFP-pre anxiety fades

• AUDUSD has jumped above 0.6350 as the risk-on impulse has regained its mojo.
• Aussie bulls are soaring despite weaker Retail Sales and GDP projections for CY2023.
• Goldman Sachs sees US NFP for October month at 225k vs. the prior release of 263k.

The AUDUSD pair has witnessed a perpendicular rally after overstepping the critical hurdle of 0.6300 in the Asian session. The commodity-linked currency has been underpinned as the market mood has soared vigorously. S&P500 futures have rebounded after two consecutive bearish settlements.

The returns on 10-year US government bonds have slipped to 4.14%. Also, the US dollar index (DXY) has refreshed its day’s low below 112.50 and is expected to discover more losses as investors have shrugged off uncertainty ahead of the US Nonfarm Payrolls (NFP) data.

The Aussie bulls have picked significant bids despite a sheer decline in Retail Sales data and weak economic projections provided in the monetary policy statement by the Reserve Bank of Australia (RBA).

The Australian Bureau of Statistics has reported the Retail Sales for the third quarter at 0.2%, lower than the expectations of 0.45 and the prior release of 1.4%. A significant decline in retail demand despite soaring price pressures signals that consumer demand has remained extremely weak.

The minutes from RBA’s monetary policy statement dictate that short-term inflation expectations have increased to 8.0% amid price growth in the service sector. Also, the Gross Domestic Product (GDP) projections for the first half of CY2023 are landed at 2.0% and 1.4% for the second half.

Going forward, the US NFP event will be the major trigger that will dictate the further direction of the asset.  Analysts at Goldman Sachs see job additions in October month at 225k vs. the prior release of 263k. The jobless rate is seen unchanged at 3.5%.