Australian dollar jumps, RBA next

The Australian dollar has started the week with strong gains. In the North American session, AUD/USD is trading at 0.7043 up 0.64% on the day.

The week ended on a sour note for the Aussie, which fell -1.33%, its worst one-day performance since May. The driver behind the sharp drop was the US nonfarm payroll report, which badly underperformed. The economy produced 210 thousand jobs in November, way below the consensus of 534 thousand. This put a damper on risk appetite and sent the Australian dollar tumbling. The Aussie had a miserable month of November, and the sharp movement on Friday and the rebound today is a stark reminder of the volatility of the markets due primarily to the uncertainty over the Omicron variant.

The RBA has been ultra-accommodative, in sharp contrast to the hawkish signals coming out of the BoE and the Federal Reserve. The RBA holds a policy on Tuesday, and the markets will be looking for clues of a change in stance from the bank.  I don’t expect to see any such pivot from policymakers. The benchmark rate will remain at 0.10%, and the fears of another pandemic wave mean that the bank faces less pressure to close the gap with market expectations, which have been much more hawkish than the RBA. The markets are expecting up to three rate hikes next year, while the RBA Governor Phillip Lowe stubbornly insists that rates will not go up prior to 2023. Lowe has acknowledged that inflation will not ease as quickly as the bank had anticipated, but he has not given any signals of changing policy the way Jerome Powell did last week, when he said it was time to retire the term ‘transient inflation’. I won’t be surprised if the Australian dollar sleeps right through tomorrow’s meeting.


AUD/USD Technical

  • There are resistance lines at 0.7118 and 0.7235
  • AUD/USD has support at 0.6938. Below, there is support at 0.6875

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 and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)