AUD/USD: Muted reaction to bigger-than-expected drop in Aussie Unemployment Rate
|- AUD/USD steady near 0.7755 following the Aussie jobs report.
- Australia's jobless rate drops more than expected but fails to propel AUD higher.
- Full-time jobs growth slows, possibly capping the upside in the AUD.
Australia's upbeat jobs report released at 00:30 GMT fails to impress the AUD bulls, leaving AUD/USD largely unaffected near 0.7755.
Australia's jobless rate ticked lower to 6.6% in December to hit the lowest level since April versus expectations for a decline to 6.7% from November's 6.8%. The economy added 50K jobs as expected following a solid job gain of 90K in November. The Participation ticked higher to 66.2% as expected. Full-time jobs grew by 35.7K following December's 84.2K.
The decline in the Unemployment Rate is a bullish development for the Aussie dollar. However, so far, the buyers have remained on the sidelines, possibly due to the slowdown in Full-time Employment.
Also, the data is not strong enough to force the Reserve Bank of Australia (RBA) to ditch its dovish bias. The central bank kept its cash rate unchanged at a record low of 0.1% in December repeated its promise to do more easing if needed. Further, it reiterated that there are no expectations for rate hikes for the next three years and won't raise borrowing costs until the inflation is within the to 3% target band.
The pair's failure to cheer the decline in the jobless rate makes it vulnerable to pullbacks. The US dollar will likely draw bids if the Treasury yields track the US inflation expectations higher. The US 10-year yield is currently flat near 1.08%, having risen from 0.90% to 1.18% earlier this month.
A potential drop in the S&P 500 futures may draw offers for the AUD and other risk currencies. The futures are currently trading flat to negative.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.