AUD/USD Cautious after Poor Australian Employment Report



Unemployment in Australia steadied at 3.9% in December, but the country shed 65,100 jobs, marking the first loss since summer and the worst print in more than two years. The Reserve bank of Australia has not ruled out further tightening, but kept rates at 5.35% at its last meeting. Today's poor employment report along with progress on inflation that decelerated to 4.1% y/y in November, helps policymakers stay on the sidelines.

Their US peers are more dovish, as their projections suggest at least three rate cuts this year. However, recent figures had shown stickiness in inflation and some officials appeared more cautious this week. Governor Waller saw "no reason to move as quickly or cut as rapidly as in the past" [1]. This led to a de-escalation in aggressive expectations around the policy path, but markets are still very hawkish. CME's Fed Watch Tool still assigns the highest probability to 150 basis points of cuts this ear, starting in March. [2]

This week's risk aversion on escalating hostilities in the Middle East and the rethink around the Fed's rate cut prospects have sent AUD/USD to a steep decline. Today's Australian data don't help the Aussie and make it vulnerable to 0.6411, although 0.6269 is distant.

Despite another poor performance this week, the pair tries to find support today, as the fall looks stretched and the Fed is closer to a policy pivot than its Australian counterpart. The daily Ichimoku cloud has the potential to contain the fall, but catalyst would be needed for a return above the EMA200 (at around 0.6660) that would shift bias on the upside.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



Retrieved 18 Jan 2024


Retrieved 15 Jun 2024

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.