"Although job ads are still falling, there are signs of stabilization, broadly implying ongoing modest jobs growth ahead. This is consistent with our view that the Reserve Bank of Australia will not cut the cash rate again this cycle."
- Scott Haslem and George Tharenou, economists at UBS
The Australian Dollar was trading around a five-week high at 0.9063 against its U.S. counterpart on Monday, as the greenback fell on the back of disastrous data from the U.S. labour market, that reflected economy's inability to create jobs in December, while participation rate stood at the lowest level since 1978. It seems that AUD/USD pair will benefit from disappointing fundamentals from the world's largest economy; however, official report from Australia can limit pair's appreciation.
On Monday the ANZ said the number of new job listings plunged 0.7% last month, sending an alarming sign for policymakers and pointing at further deterioration in the job market. At the same time, November's data has been revised to a 0.9% decline, marking the third consecutive monthly drop. On Thursday official report from the Australian Bureau of Statistics will unveil the unemployment rate and will show the state of the labour market. The rate has reached 5.8% in November, and according to analysts projections, it will remain that high in December. However, the economy is expected to create just 7,500 jobs compared with a 21,000 gain in November. While the labour market is stabilizing, a lack of new working places may push the RBA to intervene markets once again, hence, send the Australian currency lower.
© Dukascopy Bank SA