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18/07/24
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AUD Ignores Mixed Employment Data
On Thursday, the Australian dollar showed limited movement, and AUD/USD traded at about 0.6736, up 0.1% for the day in the European session.
The June employment report for Australia was mixed and this left investors confused. The Australian dollar didn’t really react to the mixed report.
Job growth soared to 50.2K, up from May’s revised gain of 39.5K and much higher than the market estimate of 20K. Most of the increases were in full-time positions, indicating a robust labor market. The unemployment rate, however, rose to 4.1%, up from May’s 4.0% which was also the market consensus.
Unemployment has been at 4% or above since Apr. and the 4.1% rate is a 3-year high also hit in April and January 2024.
The Reserve Bank of Australia has stated repeatedly that future interest rate decisions will be based on relevant data. Although inflation is the main factor, policymakers also look at other measures like employment.
The job numbers will not likely lead to the RBA shifting policy and raising rates. Markets will have to wait for the CPI report, which is due to be released on July 24, less than one week before the RBA meeting. If inflation is higher than anticipated, it would support a rate hike.
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