The Australian dollar has posted gains on Thursday, as AUD/USD trades at the 0.71 line in the North American session. It’s been a busy day, with key releases from both Australia and the US . In Australia, Employment Change and the Unemployment Rate posted excellent readings, and AUD/USD jumped close to 100 points in response. However, the pair has since given up much of these gains. Australian MI Inflation Expectations remained unchanged at 3.5%. In the US, Unemployment Claims was unchanged at 276 thousand, disappointing the markets. Thursday’s other US employment release, JOLT Job Openings, came in at 5.53 million, well above the estimate. Traders should be prepared for volatility on Friday, as the US releases Retail Sales, PPI and UoM Consumer Confidence.
On Thursday, the markets were focused on a host of employment numbers out of Australia and the US. Australian Employment Change surged with a reading of 58.6 thousand, crushing the estimate of 14.8 thousand. This was the strongest gain recorded since August 2014. The unemployment rate dropped to 5.9%, marking the first time it has been below the 6.0% level since May 2014. The markets had expected the indicator to remain at 6.2%. AUD/USD was up sharply following these releases, but has since retracted and lost much of these gains.
After a stellar performance by Nonfarm Payrolls last week, the markets were hoping for an encore from Thursday’s job numbers. Unemployment Claims came in at 276 thousand for a second straight week, higher than the estimate of 270 thousand. This should not be a cause for concern, since the four-week indicator, which is less volatile than the weekly measurement, remains at very low levels. There was much better news from JOLTS Job Openings, which surged to 5.53 million, crushing the forecast of 5.38 million.
The Federal Reserve’s recent policy statement hinted strongly about a rate hike in December, and this has understandably fueled market speculation that the Fed might finally press the rate trigger. At the same time, the Fed has been split over a rate hike for quite some time, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. At the same time, other indicators have not fared as well, particularly manufacturing data and inflation levels. While a rate hike in December is back on the front burner, it is by no means a done deal, making for plenty of speculation on the part of market players in the next several weeks regarding a possible move by the Fed.
Thursday (Nov. 12)
- 00:00 Australian MI Inflation Expectations. Actual 3.5%
- 00:30 Australian Employment Change. Estimate 14.8 thousand. Actual 58.6K
- 00:00 Australian Unemployment Rate. Estimate 6.2% Actual 5.9%
- 13:30 US Unemployment Claims. Estimate 270K. Actual 276K
- 14:30 Federal Reserve Chair Janet Yellen Speaks
- 15:00 US JOLTS Openings. Estimate 5.39M. Actual 5.53M
- 15:15 US FOMC Member Charles Evans Speaks
- 16:00 US Crude Oil Inventories. Estimate 0.8M. Actual 4.2M
- 15:15 US FOMC Member William Dudley Speaks
- 18:01 US 30-year Bond Auction
- 19:00 US Federal Budget Balance. Estimate -130.2B
- 23:00 US FOMC Member Stanley Fischer Speaks
Upcoming Key Events
Friday (Nov. 13)
- 13:30 US Core Retail Sales. Estimate 0.4%
- 13:30 US PPI. Estimate 0.2%
- 13:30 US Retail Sales. Estimate 0.3%
- 15:00 US Preliminary UoM Consumer Sentiment. Estimate 91.3 points
*Key releases are highlighted in bold
*All release times are GMT
AUD/USD for Thursday November 12, 2015
AUD/USD November 12 at 16:35 GMT
AUD/USD 0.7105 H: 0.7154 L: 0.7057
- AUD/USD posted sharp gains in the Asian session, but failed to consolidate and retracted in the European session. The pair has been steady in North American trade.
- The round number of 0.71 has switched to a support role after gains by the pair on Thursday.
- 0.7213 is a strong resistance line.
- Current range: 0.7100 to 0.7213
Further levels in both directions:
- Below: 0.7100, 0.7063, 0.7000 and 0.6931
- Above: 0.7213, 0.7440 and 0.7526
OANDA’s Open Positions Ratio
AUD/USD ratio is pointing to movement towards short positions. This is consistent with the strong gains made by the pair, which resulted in many long positions being covered. Currently, long positions have a slight majority (53%), which is indicative of a slight trader bias in favor of the Australian dollar continuing to move to higher levels.