Australian dollar falls after jobs report

Posted 7 hours ago Share Print 0

The Australian dollar is lower for a fifth straight trading day. In the European session, AUD/USD is trading at 0.6467, down 0.27% on the day. The Australian dollar has been a dreadful slide and has plunged 6.4% since Oct. 1.

Australia’s employment decelerates

Australian’s employment report in October was lukewarm. Employment increased by 15.9 thousand, down from 61.3 thousand in September and shy of the market estimate of 25 thousand. The unemployment rate remained unchanged at 4.1%. The labor market remains in solid shape despite sticky inflation and high interest rates which have dampened economic activity.

Overshadowed by the employment report, inflation expectations dropped to 3.8% in November from 4% in October. This was the lowest level since October 2021. This drop is reflective of the downswing in inflation, which dropped to 2.8% in the third quarter, the lowest level in 14 quarters.

The Reserve Bank of Australia has held its cash rate for 4.35% for eight straight meetings. The RBA noted at its November meeting that headline inflation has declined considerably but that underlying inflation remains too high. The RBA holds its final meeting of the year on Dec. 10 and is widely expected to maintain rates, which means that a long-awaited initial rate cut will have to wait until 2025.

In the US, the October consumer inflation report showed a gain of 2.6% y/y, up from 2.4% in September. The Federal Reserve isn’t too worried that inflation has accelerated for the first time in seven months, as the inflation’s path isn’t expected to be always smooth. The Fed is widely expected to lower rates by a quarter-point at the December meeting and continue trimming in 2025.

AUD/USD Technical

AUD/USD is testing support at 0.6462. Below, there is support at 0.6438
0.6504 and 0.6528 are the next resistance lines

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Bio
Google+
Latest Posts

Kenny Fisher

Market Analyst at OANDA

A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including Investing.com, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.