The Australian dollar has recorded gains for a third successive day. Currently, AUD/USD is currently trading at 0.7773, up 0.35% on the day.
Aussie job gains, inflation within expectations
There were no surprises from Australia Employment Change or inflation numbers on Thursday. The economy created 50.o thousand jobs in December, as the street consensus was right on the money. Granted, this was a modest increase, but in the right direction. The economy continues to show signs of recovery, and in H2 of 2020, Employment Change showed an increase in every month save one. Investors were pleased as the unemployment rate fell from 6.8% to 6.6%, which was better than the forecast of 6.7 percent and the lowest level since April. An encouraging note is that the unemployment rate has now fallen for two straight months, which last occurred in late 2019.
Aside from the key employment data, today is a busy day. On the inflation front, the MI Inflation Expectations ticked lower to 3.4%, down a drop from the past two readings of 3.5%. This is a useful report as inflation expectations often translate into actual inflation. Later in the day, we’ll get a look at PMIs for the manufacturing and services sectors (22:00 GMT). Both PMIs have been well into expansionary territory, with recent readings in the mid-50s range. The fly in the ointment could well be Australian Retail Sales, which will be released on Friday (00:30 GMT). Retail Sales has been red hot, with readings of 7.1% and 7.0% in the past two months. However, the markets are bracing for a sharp downturn in November, with an estimate of -1.5 per cent. A decline could see the Aussie reverse directions and fall to lower ground.
- AUD/USD is currently testing resistance at 0.7774, with the next resistance line at 0.7802. Close by, we have 0.7820, which is the high for January and also a multi-year high.
- There is support at 0.7645. If break below this line could open up the way for further losses until the next support line at 0.7586. Below this, we have the 50-day Moving Average line (MA) at 0.7530