- AUD/USD climbs to 0.6392, supported by soft US labor market data.
- US Initial Jobless Claims reach a two-month high, heightening expectations of further Fed policy easing.
- Australian employment outperforms forecasts with 35.6K jobs added in November, while unemployment falls to 3.9%.
AUD/USD Recovers as US Jobs Data Signals Possible Fed Easing
The Australian Dollar gained ground against the US Dollar on Thursday, trading at 0.6392, up 0.36%, following weak US labor market data. The US Bureau of Labor Statistics (BLS) reported Initial Jobless Claims for the week ending December 7 rose to a two-month high of 242K, surpassing estimates of 220K. Meanwhile, the Producer Price Index (PPI) for November showed headline inflation at 3% year-over-year (YoY), above forecasts of 2.6%, while Core PPI climbed to 3.4% YoY, exceeding projections of 3.2%.
Despite strong PPI figures, the US Dollar failed to gain traction. The US Dollar Index (DXY), which measures the greenback against six major currencies, remained firm at 106.79, up 0.15%.
Earlier in the Asian session, Australian labor market data exceeded expectations. November employment rose by 35.6K, outperforming the forecasted 25K, while the unemployment rate fell from 4.1% to 3.9%, beating predictions of 4.2%. Following the data, the swaps market adjusted the probability of an RBA rate cut in February to 50%, down from 70%. However, the RBA maintained a dovish tone, stating, “The Board is gaining some confidence that inflation is moving sustainably towards target.”
AUD/USD Technical Outlook
The AUD/USD pair surged to a daily high of 0.6429 after the Australian employment data but trimmed gains as robust US PPI figures suggested the Federal Reserve might remain cautious about easing rates.
Momentum has turned slightly bullish in the near term, though the overall trend remains bearish, with the Relative Strength Index (RSI) still in negative territory.
Upside Levels: If AUD/USD reclaims 0.6400, the next resistance level is 0.6500, followed by the 50-day Simple Moving Average (SMA) at 0.6568.
Downside Levels: On the downside, a drop below the December 11 daily close of 0.6336 could see the pair test 0.6300, with further losses exposing the October 23, 2023 swing low at 0.6270.
