The Australian dollar has reversed directions in the Wednesday session. Currently, AUD/USD is trading at 0.7781, up 0.41% on the day.
Australia job data within expectations
Australia created 29.1 thousand jobs in January, just shy of the forecast of 30.2 thousand. The reading pleased investors, as the Australian dollar has posted gains today. Although within expectations, the reading points to a worrisome trend, as Employment Change has slowed for a third successive month. Back in October, the economy created 178.8 thousand jobs, but job creation has been slipping since then. At the same time, the unemployment rate has been steadily falling and came in at 6.4%, down from 6.6%. This beat the street consensus of 6.5%.
With the Australian economy showing a V-shaped recovery from the downturn due to Covid, investors are counting on a strong rebound in Retail Sales for December (00:30 GMT). After two declines above 4%, the forecast stands at 2.1%.
Despite the rosy outlook for the economy, the RBA remains very cautious. Interest rates have been pegged at a record low of 0.10%, and at the last policy meeting, the bank opted to extend its QE program until October at its February policy meeting. The minutes of that meeting indicated that the central bank deemed it necessary to stay in line with other central banks of developed markets, which have extended their QE schemes. As well, the RBA has utilized QE in an attempt to curb the appreciation of the Australian dollar, in order to ensure price stability and protect the export sector. The Aussie remains strong – earlier in the week, the currency touched a high of 0.7805, its highest level since early January.
AUD/USD remains rangebound on Wednesday.
- AUD/USD continues to put pressure on resistance at 0.7805. The next resistance line is at 0.7848
- There is support at 0.7685, followed by support at 0.7608
- The 50-day moving average (MA) is situated at 0.7672
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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