AUD/USD Faces Resistance Despite Strong Jobs Report
AUD/USD is finding it hard to maintain a position above its 200-day moving average at 0.6455, even as Australia's labor market shows remarkable strength. This scenario presents a curious case for forex traders and analysts alike.
RBA's Cautious Approach Amid Employment Surge
In April, employment figures significantly overshot expectations, with 89k jobs added against a consensus of 22.5k. This growth was bolstered by a 59.5k increase in full-time jobs, alongside a 29.5k rise in part-time employment. Despite these gains, the unemployment rate remained steady at 4.1%, and the labor force participation rate climbed to 67.1%, nearing its record high.
RBA cash rate futures are currently pricing in a 25bps cut to 3.85% at the upcoming policy meeting, reflecting eased inflation pressures. However, the robust job market suggests that the RBA may keep rates restrictive for longer, with the nominal neutral rate estimated between 2.75% and 3.00%.
Looking ahead, cash rate futures indicate 75bps of total easing over the next 12 months, a reduction from the previously anticipated 100bps, with the policy rate expected to bottom at 3.25%.
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