December month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 GMT on Thursday, will be the key catalyst for the AUD/USD pair traders. With the Reserve Bank of Australia (RBA) has been keeping a close eye on the jobs report, coupled with the latest bushfires, extremely downbeat data will increase the odds of further rate cuts in 2020.
Market consensus favors Employment Change to decline to 15.0K from 39.9K on a seasonally adjusted basis whereas the Unemployment Rate is likely staying unchanged to 5.2%. Also, no change is anticipated in 66.00% Participation Rate. It should also be noted that January month Consumer Inflation Expectations, expected 3.8% versus 4.0% prior, will also join the headline job reports to decorate the economic calendar.
Westpac stays modestly pessimistic ahead of the release as their analysts say,
The December labor force survey for Australia (11:30 am Sydney/8:30am Singapore/HK) is expected to see the trend deceleration in employment growth apparent since May persists. Following November’s outsized 37k gain, we look for a 5k decline in December (market +12k). Holding participation flat, the unemployment rate is likely to lift to 5.3%.
The Australia and New Zealand Banking Group (ANZ) highlight the importance of the data:
A gain of 10k or less for the month would confirm a sharp slowing in employment growth since Q2 and Q3 last year. While employment is a lagging indicator, a sharp slowdown will cast doubt on the sustainability of the economy’s modest revival.
How could the data affect AUD/USD?
Given the likely downside impact of the Australian bushfires on the employment data, actually weaker releases might offer fewer losses to the Aussie, except being too pessimistic. On the contrary, surprisingly positive data will have a high impact considering the pair’s recent declines and a need for a pullback.
Technically, an upward sloping trend line since early-October highlights the importance of 0.6830 as the key support holding the key to pair’s further downside to sub-0.6800 area. Alternatively, buyers will refrain from the big positions unless witnessing a daily closing beyond a 21-day SMA level of 0.6915.
Key Notes
AUD/USD clings to 100-day SMA near 0.6845 ahead of Aussie employment data
AUD/USD Forecast: Employment and inflation data could rock the Aussie
About the Employment Change
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).
About the Unemployment Rate
The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).
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.
Recommended content
Editors’ Picks
USD/JPY holds near 155.50 after Tokyo CPI inflation eases more than expected
USD/JPY is trading tightly just below the 156.00 handle, hugging multi-year highs as the Yen continues to deflate. The pair is trading into 30-plus year highs, and bullish momentum is targeting all-time record bids beyond 160.00, a price level the pair hasn’t reached since 1990.
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Ethereum could remain inside key range as Consensys sues SEC over ETH security status
Ethereum appears to have returned to its consolidating move on Thursday, canceling rally expectations. This comes after Consensys filed a lawsuit against the US SEC and insider sources informing Reuters of the unlikelihood of a spot ETH ETF approval in May.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.