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15/08/24
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AUD Higher After Strong Job Growth
On Thursday, the Australian dollar was in positive territory, and AUD/USD traded at about 0.6607, up 0.16% for the day in the European session. The Aussie earlier rose to as high as 0.6633, up 0.48% before retracting.
July’s Australian employment report was mixed. Job growth stayed strong as the economy added 58.2K jobs, up from June’s revised 52.2K and crushing the estimate of 20K. Full-time employment increased by 60.5K and part-time jobs dropped by 2.3K.
The unemployment rate inched up from 4.1% in June to 4.2%, which was also the market consensus. Although this was the highest unemployment rate since Jan. 2022, the increase was indicative of an increased worker participation rate.
The employment report was generally positive and supports the RBS’s hawkish rate policy stance. RBA Governor Bullock said last week that a rate cut was not likely for the next 6 months. Markets are more dovish and expect a rate cut before the end of this year. The markets have however trimmed the likelihood of a rate cut in November to 45%, down from 55% before the employment release.
In August, consumer inflation expectations rose from 4.3% in July to 4.5%. This was the highest level since Apr. This date also supports the RBA continuing its rate policy of “higher for longer”.
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