AUD extends gains, wage growth rises

Australian wage inches higher

Australian wage growth edged higher in the fourth quarter, rising 2.3% YoY, just shy of the consensus of 2.4%. On a quarterly basis, wages rose 0.7%, matching the forecast. Wages are moving higher, but likely not fast enough to move the needle on the RBA’s rate plans. Wage data is keenly monitored by the RBA, which has insisted that inflation will not be sustainable in its target of 2-3% unless wage growth is much higher. With the pace of wage growth lagging behind inflation, which is around 3.5%, the RBA can continue to preach patience, although the markets are more hawkish and have priced in five rate hikes this year.

The Australian dollar has jumped higher, as investors are once again showing an appetite for risk assets, despite the ongoing crisis in Ukraine. The US and other western countries slapped sanctions on Moscow in response to Russian forces entering eastern Ukraine, and the White House sharpened its language, saying an invasion has begun. Nevertheless, there markets were somewhat relieved that the sanctions were not more severe, leaving a small crack for diplomacy, should the Russians wish to lower the temperature.

The Federal Reserve is widely expected to raise rates at its March meeting. The most likely scenario is a traditional hike of 25 basis points, but just a week ago there was a reasonable likelihood of a 50-basis point move. However, the Ukraine crisis and the surge in oil prices could trigger stagflation, and central bankers may decide that it is prudent to hold off from a rate hike in the present circumstances. Even if the Fed pushes ahead with a rate hike in March, the Ukraine standoff could well slow down the Fed’s plans to raise rates, especially if there is an invasion and oil prices go through the roof.


AUD/USD Technical

  • AUD/USD is putting strong pressure on resistance at 0.7242. Above, there is resistance at 0.7306
  • There is support at 0.7100 and 0.7022

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 Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

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