The Australian dollar is in negative territory today, as it trades slightly above the 0.74 line in the North American session.
Australia’s employment report was respectable, and the Australian dollar’s reaction was muted. The economy created 17.9 thousand new jobs in March, down from 77.4 prior and shy of the estimate of 40.0 thousand. The unemployment rate remained at a sizzling 4.0%, the lowest since 2008.
Today’s numbers are unlikely to shed much light on the timeline for the RBA’s expected rate hike. The Bank stayed on the sidelines at the April meeting, but the change in language in the rate statement was enough to convince the markets that a rate-hike cycle is imminent. Inflation is soaring, and the strong economic fundamentals indicate that the economy can handle a series of rate hikes. What is standing in the way of a May hike is the Australian general election on May 21st. The RBA will be reluctant to make a move in the middle of an election campaign, although the record books indicate that the central bank did raise rates in November 2007 in the midst of an election.
US Retail Sales gets thumbs-up
The Australian dollar fell early in the North American session, after the release of US March retail sales. The US dollar has posted broad gains, as investors were relieved that the retail sales were within expectations, despite soaring inflation. Core retail sales actually beat the consensus of 1.0% MoM, with a gain of 1.1%. This was up nicely from 0.6% in February. The headline figure came in at 0.6% (0.8% prior). This was just shy of the 0.5% estimate.
The US dollar also received some help from Preliminary UoM Consumer Sentiment, which improved to 65.7 in April, up sharply from 59.4 in March. The Expectations Index surged, pointing to renewed consumer confidence.
- AUD/USD faces resistance at 0.7605 and 0.7750
- There is support at 0.7371 and 0.7282
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 firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.