AUD/USD falls on strong US jobs data

The Australian dollar is in negative territory today. In the North American session, AUD/USD is trading at 0.6739. down 0.43%.

US Unemployment claims propels USD higher

US unemployment claims fell to a 3-month low, another indication that the US job market remains robust. Initial unemployment claims fell to 222 thousand, down from 228 thousand and well below the estimate of 240 thousand. This is the fourth straight week that claims have fallen, and the release comes after a nonfarm payroll gain of 315 thousand, which was slightly stronger than expected.

For the Federal Reserve, strong employment data is crucial, as a resilient labour market means that the Fed can continue to raise rates aggressively. Economic growth contracted in the first and second quarters, but strong job numbers are an indication that the economy is not in recession.

RBA’s Lowe says more hikes coming

RBA Governor Lowe said on Thursday that the RBA would need to raise interest rates at least twice more to contain the “scourge” of inflation. Lowe admitted that the pace of inflation had surprised the RBA and other central banks. Lowe pointed a finger at the Ukraine war, blaming higher energy prices as one of the drivers of higher inflation in Australia.

The cash rate is currently at 2.35% and Lowe said that the pace and extent of rate hikes would be data-dependent. As the cash rate moves higher, there is a stronger likelihood of the RBA easing up, which means that October can be expected to bring a rate hike of 0.25% or 0.50%. The terminal rate should peak early in 2023, at around 3.35%.


AUD/USD Technical

  • AUD/USD is testing support at 0.6737. Below, there is support at 0.6661
  • There is resistance at 0.6737 and 0.6846

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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.

Kenny Fisher

Kenny Fisher

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