AUD/USD rebounds from 0.6300 on soft US job data and Services PMI report

• AUD/USD finds cushion near 0.6300 amid correction in the US Dollar.
• US private payrolls halved to 89k in September from August reading.
• US ISM Services PMI landed at 53.6 as expected but lower than the former release of 54.5.

AUD/USD rebounds after remaining choppy near the round-level support around 0.6300 in the early New York session. The Aussie asset finds buyers’ interest as the market mood improves due to a correction in the US Dollar propelled by weaker-than-anticipated Employment Change data, reported by the Automatic Data Processing (ADP) agency.

The S&P500 opens on a bullish note as the risk-off profile eases as fresh additions of US private payrolls in September were halved to 89k from the August reading. Investors anticipated lower hiring at 153k. Soft labor market data is expected to fade expectations of one more interest rate hike from the Federal Reserve (Fed) in the remainder of 2023.

On Tuesday, Cleveland Fed Bank President Loretta Mester reiterated hawkish guidance on the interest rate outlook. Mester said that she is open to hiking interest rates further in the November monetary policy meeting if the economy remains resilient the way it has been. Soft labor market data is expected to force policymakers to return to a neutral stance.

The US Dollar Index (DXY) corrects to near 106.60 after weak job data. Meanwhile, the Institute of Supply Management (ISM) has reported the Services PMI data at 53.6 as expected, lower than the August reading of 54.5. The Services PMI data carries a significant impact on the US Dollar Index as it represents the service sector, which accounts for two-thirds of the US economy. New Orders dropped significantly to 51.8 against the former release of 57.5.

On the Australian Dollar front, an unchanged interest rate decision by the Reserve Bank of Australia (RBA) has trimmed its appeal. The RBA kept interest rates unchanged at 4.10% on Tuesday despite a rebound in the Australian monthly Consumer Price Index (CPI) to 5.2% in August due to a rise in oil prices.