AUD/USD trims losses, returns to 0.6600 as US Dollar recovery stalls

• The Aussie attempts to pick up from lows against the USD and returns above 0.6600.
• The pair remains on its back foot, with the US Dollar supported by strong US data.
• Weak Australian employment numbers have raised speculation of a surprise rate cut by the RBA.
  

The Australian Dollar returned to levels right above the 0.6600 level against the USD, after finding support at the 0.8590 area in Friday's early European session. The pair, however, maintains its immediate bearish trend intact, on track to a 0.6% weekly loss.

Weaker-than-expected Australian labour data raised some speculation about the possibility of a surprise rate cut later this month, and sent the Aussie Dollar lower against its main peers.

Net employment fell by 5.4K in August, against market expectations of a 22K increase and following a 26.5K growth in July. The sharp decline in full-time employment has been partially offset by the rise in part-time jobs, and the Unemployment rate remained steady at 4.2% but the feeling is that the labour market is losing momentum.

The USD appreciated further following US claims, manufacturing data

In the US, the Fed cut interest rates and hinted at further easing in the coming months, but Fed Chairman Jerome Powell adopted a more cautious tone, providing a fresh impetus to the US Dollar.

The Greenback's recovery was further supported by a sharper-than-expected decline in weekly Jobless Claims, which fell by 33K to 231K in the second week of September, beating expectations, twice as much as the market consensus of a 14K decline.

Furthermore, the Philadelphia Fed Manufacturing Index revealed a sharper-than-expected recovery of the region's sector activity. The Index bounced to 23.2, after a 0.3% contraction in August, bearing expectations of a more modest rebound, to 1.7. These figures did not dampen hopes of Fed easing, but have calmed fears of a sharp economic slowdown and underpinned the US Dollar's rebound.