Forex Flash: RBA will find it hard to resist further cuts - NAB (Barcelona) - Australian employment declined 5,500 in December as NAB had expected (-5,000), against a market forecast of 4,000. The jobless rate rose from a revised 5.3% in November to 5.4% in December, as expected, NAB notes, with the participation rate unchanged at 65.1%. The bank states: "The bad news for the labour market will continue in 2013. The unemployment rate is forecast to keep rising towards 5.7% which will justify further easing by the RBA..."

NAB adds: "The anticipated deterioration in the labour market was a key factor in the RBA’s easing in late 2012. The leading indicators suggest that labour demand remains soft and the unemployment rate will keep rising. Slower economic growth will also weigh on the labour market. GDP growth in 2013 is forecast at 2%, well below the 3.5% pace in 2012. The RBA will find it hard to resist further cuts in the cash rate as the unemployment rate continues to rise."

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