The Australian dollar has posted strong gains in the Thursday session. AUD/USD is currently trading at 0.7629, up 0.67% on the day. The Aussie remains red-hot, with gains of 1.2 per cent this week.
Australia job creation sparkles
The Australian dollar is up a staggering 19.5% since April 1st, and much of that gain is a result of US dollar weakness rather than Aussie strength. However, Australia has also recorded some positive data, which has boosted the currency. This was the case on Thursday, as AUD/USD reacted positively to November’s employment releases. The economy created 90.0 thousand jobs, crushing the street consensus of 40.9 thousand. Aside from a decline in September, job creation has been strong in H2 of 2020, as the labour market has made a strong recovery from the ravages of Covid-19. There was more good news as the unemployment rate dropped from 7.0% to 6.8%, its lowest level in three months. Economists had expected the rate to remain unchanged.
FOMC holds off on further easing
The Federal Reserve kept the markets guessing right up to show time, as it was unclear what message policymakers would deliver at the end of the policy meeting. With the US economy showing signs of a slowdown as Covid-19 makes a comeback, there was a distinct possibility that the Fed would alter its asset purchase program to boost economic growth. In the end, however, the Fed opted to keep QE at current levels and provided an optimistic view of economic conditions, revising GDP forecasts higher and unemployment lower. Had the Fed taken additional easing measures, the sagging US dollar would have likely dropped lower. With the Fed staying on the sidelines, the US currency missed a bullet. The US Congress is inching towards a compromise agreement on a massive stimulus package, and the Fed could make some moves early in the New Year, once a stimulus program is in place and funds are flowing into the economy.
- AUD/USD broke through resistance at 0.7614 in the Asian session. Above, there is resistance at 0.7693
- There is support at 0.7414, followed by support at 0.7293