AUD/USD turns upside down in the aftermath of US NFP

• AUD/USD tumbles to near 0.6700 after the release of the US NFP data for August.
• Disappointment from US job growth data boosts Fed interest rate cut hopes.
• RBA Bullock's hawkish interest rate guidance failed to uplift the Australian Dollar.

The AUD/USD pair surrenders its intraday gains and turns negative in Friday's North American session. The Aussie asset slumps to near 0.6700 in the aftermath of the United States (US) Nonfarm Payrolls (NFP) data for August, which increased buying interest in the US Dollar (USD) significantly.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, reverses its downside move and climbs to near 101.40.

The US NFP report indicated that the job demand remained weaker than expected. Fresh payrolls came in lower at 142K than expectations of 160K but higher than July's release of 89K, downwardly revised from 114K. The Unemployment Rate fell to 4.2%, as expected, from the prior release of 4.3%.

Disappointing US job data has given a green signal to the Federal Reserve (Fed) to start reducing the policy-easing process this month. Weak US job data has also prompted market expectations that the Fed could begin cutting interest rates aggressively.

According to the CME FedWatch tool, the likelihood for the Fed to begin reducing interest rates by 50 basis points (bps) to 4.75%-5.00% has increased to 45% from 30% recorded a week ago.

In the Asia-Pacific region, the Australian Dollar (AUD) performs weakly despite firm speculation that the Reserve Bank of Australia (RBA) is unlikely to cut interest rates this year. Prospects of RBA keeping interest rates at their current levels by the year-end strengthened after RBA Governor Michele Bullock's hawkish interest rate guidance. Bullock said in her speech at the Anika Foundation on Thursday, "If the economy evolves broadly as anticipated, the board does not expect that it will be in a position to cut rates in the near term."