The Australian dollar is in positive territory on Thursday. AUD/USD is trading at 0.6607 in the European session, up 0.16% on the day at the time of writing. Earlier, the Aussie rose as high as 0.6633 (0.48%) before retracting.
Australian Job Growth Jumps but Unemployment Rises
The Australian employment report for July was an interesting mix. Job growth remained strong as the economy added 58.2 thousand jobs, up from a revised 52.2 thousand in June and crushing the estimate of 20 thousand. Full-time employment rose by an impressive 60.5 thousand as part-time jobs dipped by 2.3 thousand.
At the same time, the unemployment rate nudged higher to 4.2%, up from 4.1% in June which was also the market estimate. This marked the highest unemployment rate since January 2022, but the increase was reflective of a higher worker participation rate.
Overall, the employment report was positive and supports the Reserve Bank’s hawkish stance on rate policy. Last week, RBA Governor Bullock said that a rate cut was unlikely for the next six months. The markets are more dovish and anticipate a rate cut before the end of the year. Still, the markets have pared the likelihood of a November rate cut to 45%, down from 55% prior to the employment release.
On the inflation front, consumer inflation expectations rose to 4.5% in August, up from 4.3% in July and the highest level since April. This release also supports the case for the RBA to continue its rate policy of “higher for lower” until inflation data moves closer to the target band of 2% to 3%. The RBA holds its next policy meeting on September 24.
AUD/USD Technical
- AUD/USD is testing resistance at 0.6612. Above, 0.6628 is a weak resistance line, followed by 0.6659
- 0.6581 and 0.6566 are the next support levels