Aussie briefly drops after jobs report PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Aussie briefly drops after jobs report

AUD/USD dropped close to 100 points in the Asian session but has recovered and is trading in positive territory.

Australia’s labour market remains solid

Australia released September’s employment report earlier Thursday, which indicated that the labour market remains robust. The economy added 13,300 full-time jobs, with a decline of 12,400 part-time jobs. This follows a superb gain of 55,000 jobs in August.

The strong domestic economy, in particular the labour market, has contributed to rising inflation, forcing the Reserve Bank of Australia to continue raising rates. The RBA surprised the markets with a small rate hike of 0.25% at its October meeting, which was smaller than expected.  At the meeting, the RBA noted that inflation remains too high, but the modest rate hike fits in with that the central bank’s projection that inflation will peak in early 2023.  The RBA meets on November 1st, with the release of the September inflation report just a few days prior. The inflation data will likely be a major factor in the RBA’s rate decision.

The Australian dollar has hit hard times. Since August 1st, AUD/USD has plunged 550 points, as risk sentiment has taken a beating and the Federal Reserve’s aggressive tightening has boosted the US dollar. China’s economy has been struggling and the escalation of the Ukraine conflict, with no end in sight, has sapped the appetite for risk-related currencies like the Australian dollar. With the Fed expected to remain aggressive for the remainder of 2023 and China and Ukraine likely to remain hotspots, there is room for the Aussie to continue to head south.

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AUD/USD Technical

  • AUD/USD tested support at 0.6250 earlier today. The next support level is 0.6121
  • There is resistance at 0.6331 and 0.6460

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher
Kenny Fisher

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