• Australia to add 200K jobs in November, Unemployment Rate to drop to 5%.
  • RBA sees the economy as likely to return to its pre-Delta path in the first half of 2022. 
  • Post-Delta upturn in US jobs already priced in? AUD/USD looks vulnerable amid the Fed.

Australia’s labor market may see an upturn in November, the latest employment report due to be published by the Australian Bureau of Statistics (ABS) is likely to show this Thursday.

The employment indicators are expected to show labor market optimism, as the economy emerges from the Delta covid variant outbreak-induced lockdowns that extended from August through October.

Employment scenarios improves, RBA optimistic

Having witnessed a slump in the employment sector in October, the OZ economy is expected to see an addition of a whopping 200K jobs in November. The Unemployment Rate is expected to drop to 5% from the 5.2% jump seen previously. The Participation Rate is forecast to rise sharply to 65.5% last month when compared to the previous figure of 64.7%. In October, the Australian economy lost 46,3K jobs during a period when half the economy was still in lockdown.

Source: FXStreet

The expected recovery in the Australian labor market follows robust Australia & New Zealand Banking Group’s (ANZ) monthly job ads data, which surged 7.4% in November to reach above their pre-pandemic level. 

Australia's rising job ads suggest strong employment growth ahead while reinforcing the Reserve Bank of Australia’s (RBA) confidence in the post-Delta economic recovery.

At its November monetary policy decision, the Reserve Bank of Australia (RBA) kept its monetary policy settings unadjusted, with the Official Cash Rate (OCR) on hold at a record low of 0.10% and weekly bond purchases at AUD4 billion.

The RBA sounded upbeat about the economic outlook, however, citing that “the economy is expected to return to its pre-Delta path in the first half of 2022” versus H2 2022 in the November forecasts.

The central bank also mentioned, “the omicron strain is a new source of uncertainty, but it is not expected to derail the recovery.”

AUD/USD probable scenarios

AUD/USD traders are positioned for the critical jobs data just when Australia has reopened borders to vaccinated skilled migrants and foreign students after a nearly two-year ban on their entry. Meanwhile, the all-important US Federal Reserve (Fed) monetary policy decision is scheduled on Wednesday, which is expected to set the tone and direction for markets heading into the year-end holidays.

Fed sentiment may overshadow the impact of the Australian jobs data, therefore, prompting a limited reaction in the aussie dollar.

In the lead-up to the Fed showdown and the Australian jobs data, markets have already discounted faster tapering by the Fed and a significant improvement in the labor market for Australia in the reported month.

AUD/USD, thus, could ‘sell that fact’ on an upbeat jobs report, as the recent uptick in the price is likely to remain capped below the 0.7190 hurdle.

The Relative Strength Index (RSI) is inching higher but remains below the central line, suggesting that upside attempts appear shallow. A sustained break above the latter could prompt buyers to challenge the bearish 200-Simple Moving Average (SMA) at 0.7243.

On the flip side, a disappointing Australian jobs report combined with the risk-off mood in markets could knock the aussie back down towards the weekly lows of 0.7090. The next downside target is envisioned at the 0.7050 psychological level.

AUD/USD: Four-hour chart

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: Risk-aversion, softer Aussie inflation directs bears to sub-0.6500 zone ahead of US GDP

AUD/USD: Risk-aversion, softer Aussie inflation directs bears to sub-0.6500 zone ahead of US GDP

AUD/USD pares intraday losses around 0.6490, recently bouncing off daily lows, as traders await fresh clues to defend the latest pullback moves. That said, downbeat prints of Australia’s monthly Consumer Price Index (CPI) joined the risk-off mood to weigh on the Aussie pair during early Thursday.

AUD/USD News

EUR/USD drops back below 0.9700 as yields rebound ahead of US GDP, German inflation

EUR/USD drops back below 0.9700 as yields rebound ahead of US GDP, German inflation

EUR/USD sellers are up and roaring as sour sentiment joins firmer yields to renew the downside during early Thursday, after a day full of surprises and positive performance. Germany’s HICP may not impress pair buyers unless US GDP disappoints.

EUR/USD News

Gold sees cushion around $1,650 after a corrective move, US GDP buzz

Gold sees cushion around $1,650 after a corrective move, US GDP buzz

Gold price is experiencing a healthy correction in the Tokyo session after witnessing a bumper rally. The precious metal is expected to find significant bids around the immediate cushion of $1,650.00 as the downside bias is not backed by momentum. 

Gold News

Cardano price remains still after Vasil hard fork, what’s next?

Cardano price remains still after Vasil hard fork, what’s next?

Cardano price has remained neutral despite the blockchain undergoing a massive upgrade this week via the Vasil hard fork. This update is multi-faceted and brings a host of improvements to the so-called “Ethereum-killer”, including transaction throughput.

Read more

A week after Japanese yen intervention

A week after Japanese yen intervention

Last Thursday was an incredibly volatile trading session for the USD/JPY. This volatility was largely caused by the Bank of Japan's (BoJ) intervention in the currency markets to defend its depreciating currency, the Japanese Yen. Last week’s move was the first time since 1998 that the BoJ had intervened.

Read more

Majors

Cryptocurrencies

Signatures