AUD/USD Falls Ahead of Employment Report
MarketPulse | Mar 15, 2023 08:38AM ET
The Australian dollar, which posted strong gains early in the week, has run into a wall on Wednesday. In the European session, AUD/USD trades at 0.6638, down 0.66%.h2 Australian job growth expected to rebound/h2
Australia releases the February employment report on Thursday (Australia time). Job growth is expected to rebound, with a consensus of 48,500 after a soft January read of -11,500. The unemployment rate is expected to tick lower to 3.6%, down from 3.7%. The Reserve Bank of Australia will be watching closely as a robust labor market has enabled the central bank to continue its tightening – the Bank raised rates last week by 25 basis points, a 10th straight hike which brought the cash rate to 3.60%. The good news is that the end of the tightening cycle could be near, with the market's pricing in a pause at the April meeting. Consumers and businesses are weary of rising interest rates, and confidence indicators do not paint an optimistic picture.
Along with the job data, Australia releases consumer inflation expectations for March. The markets are braced for the indicator to rise to 5.4% after a 5.1% gain in February. Inflation expectations are a key inflation gauge as they can set the direction of actual inflation, and the RBA will not be happy if inflation expectations accelerate.
There is an uneasy calm in the air as the dust begins to settle after the Silicon Valley Bank collapse. The sky is not falling, not even above US bank towers, as regional bank stocks have rebounded.
AUD/USD Technical
- AUD/USD is testing support at 0.6639. Below, there is support at 0.6508
- 0.6713 and 0.6844 are the next resistance lines
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