On Thursday, the Australian dollar saw an increase against the US dollar, driven by a new jobs report from Australia that strengthened expectations for potential monetary tightening by the Reserve Bank of Australia (RBA).
The Australian Bureau of Statistics (ABS) reported a loss of 65,000 jobs in December, far exceeding the forecast of 30,000 and marking a notable shift from November’s revised job losses of 28,000. Interestingly, the unemployment rate dropped to 4.1%, contrary to predictions of a rise to 4.4%.
Sean Crick, who heads labor statistics at the ABS, noted that a surge of young individuals aged 15 to 24 entering the workforce contributed positively to employment growth and the decline in the unemployment rate.
The International Monetary Fund (IMF) advised the RBA to exercise caution, reminding that inflation has lingered above the central bank’s target range of 2-3%, despite a quicker-than-anticipated drop in the headline CPI for November.
US Dollar Shows Resilience Amid Economic Data
- The U.S. Dollar Index (DXY) has remained steady following modest gains in the previous session, currently fluctuating around 98.80.
- The greenback gained ground on Wednesday after reports surfaced that U.S. President Donald Trump indicated he might retract his plans to impose tariffs on European countries opposing Greenland.
- President Trump did mention that the U.S. and NATO had “established a framework for a future agreement on Greenland,” but the specifics of this framework were not defined, leading to some uncertainty.
- Anticipations surrounding further rate cuts by the Federal Reserve (Fed) have eased due to recent labor market data. Fed officials claimed there’s little need for any additional easing until inflation shows signs of moving sustainably towards the 2% target. Analysts at Morgan Stanley have adjusted their projections for 2026, now forecasting one cut in June and another in September.
- The People’s Bank of China announced on Tuesday that the lending prime rate (LPR) would remain unchanged, with the one-year LPR at 3.00% and the five-year LPR at 3.50%. Given the close trade relationship, shifts in the Chinese economy could influence the Australian dollar.
- China’s industrial production experienced a year-on-year increase of 5.2% in December, up from November’s 4.8%, buoyed by strong manufacturing activities tied to exports. In contrast, retail sales only rose by 0.9% year-on-year, lagging behind expectations.
- Earlier this week, Australia released its TD-MI inflation rate, which recorded a 3.5% year-on-year increase for December, rising from 3.2%. Monthly inflation also surged by 1.0%, marking the fastest growth since December 2023.
- RBA policymakers noted a slight rebound in inflationary pressures, although it has dropped significantly from its peak in 2022. The headline CPI measured a 3.4% year-on-year rate in November, the lowest since August, albeit still above the RBA’s aim of 2-3%.
- The RBA concluded that while there are moderate inflation risks, the downside risks from global events are diminishing. Members expect just one more rate cut in the coming year, with underlying inflation remaining above 3% temporarily and projected to dip to about 2.6% by 2027.
Australian Dollar Approaches 0.6800 Resistance Level
The AUD/USD pair is hovering around 0.6790 this Thursday. Analysis of daily charts shows the pair is moving within an ascending channel, which suggests a continued bullish trend. The 9-day exponential moving average (EMA) is situated above the 50-day EMA, further supporting this upward momentum. However, the 14-day relative strength index (RSI) is nearing overbought territory at 69.93, signaling potential fatigue.
The pair is testing immediate resistance at the notable level of 0.6800, with the upper limit of the ascending channel around 0.6810. Should it break through this channel, the price might reach 0.6942, a notable high since February 2023.
On the downside, crucial support rests at the 9-day EMA, which is currently at 0.6732. A dip below this average could weaken price momentum, aiming for the channel border at 0.6680 and then the 50-day EMA at 0.6656.
Current Australian Dollar Prices
Below is a summary of today’s percentage changes in the Australian Dollar (AUD) against key currencies. Notably, the Australian dollar has performed strongest against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.00% | 0.29% | -0.06% | -0.56% | -0.20% | -0.10% | |
| EUR | 0.02% | 0.02% | 0.28% | -0.04% | -0.53% | -0.17% | -0.08% | |
| GBP | 0.00% | -0.02% | 0.28% | -0.06% | -0.56% | -0.19% | -0.10% | |
| JPY | -0.29% | -0.28% | -0.28% | -0.33% | -0.81% | -0.48% | -0.36% | |
| CAD | 0.06% | 0.04% | 0.06% | 0.33% | -0.48% | -0.14% | -0.04% | |
| australian dollar | 0.56% | 0.53% | 0.56% | 0.81% | 0.48% | 0.36% | 0.45% | |
| new zealand dollar | 0.20% | 0.17% | 0.19% | 0.48% | 0.14% | -0.36% | 0.10% | |
| swiss franc | 0.10% | 0.08% | 0.10% | 0.36% | 0.04% | -0.45% | -0.10% |
This table outlines the percentage change between major currencies, with the base currency listed in the left column and the quote currency along the top row. For instance, selecting Australian dollars from the left column and moving horizontally to U.S. dollars shows the percentage change displayed in that box.
