- The Australian Dollar appreciates following the domestic mixed labor market.
- Australia’s Employment Change rose by 35,600 in November, exceeding the previous 12,100 and the expected 25,000 readings.
- Traders still expect the Fed to proceed with a quarter-point rate cut in December following the latest US CPI report.
The Australian Dollar (AUD) halts its two days of losses against the US Dollar (USD) on Thursday. The AUD remains stronger after the release of domestic mixed employment data. The seasonally adjusted Employment Change increased by 35,600, bringing the total number of employed people to 14,535,500 in November. This exceeded the previous reading of 12,100 and the expected figure of 25,000. Meanwhile, the Unemployment Rate fell to 3.9%, the lowest since March, lower than market estimates of 4.2%.
The AUD/USD pair faced challenges due to the broadly stronger US dollar (USD) following the release of the US inflation report on Wednesday. US Consumer Price Index (CPI) rose to 2.7% year-over-year in November from 2.6% in October. The headline CPI reported a 0.3% reading MoM, in line with the market consensus. Meanwhile, the core CPI, excluding volatile food and energy prices, climbed 3.3% YoY, while the core CPI increased 0.3% MoM in November, as expected.
However, the latest US inflation report does not seem enough to keep the Federal Reserve (Fed) from cutting rates at its December meeting next week. Traders are now pricing in nearly a 99% chance of Fed rate reductions by 25 basis points on December 18, according to the CME FedWatch Tool. Traders shift their focus on the US November Producer Price Index (PPI) for fresh impetus, which is due later on Thursday.
Australian Dollar appreciates despite China’s anticipated sharp hike in US tariffs
- The AUD received downward pressure on Wednesday as China, a key trading partner of Australia, saw its top leaders and policymakers consider letting the Chinese Yuan fall in response to an expected sharp hike in US tariffs, per Reuters.
- On Tuesday, China President Xi Jinping stated, "China has full confidence in achieving this year's economic target." Xi emphasized that China will continue to serve as the largest engine of global economic growth and asserted that there would be no winners in tariff wars, trade wars, or tech wars.
- China's Trade Balance (CNY) increased to CNY 692.8 billion in November, up from CNY 679.1 billion in the previous month. Exports grew by 1.5% year-over-year in November, compared to the 11.2% rise in October. Meanwhile, imports increased by 1.2% YoY, recovering from the 3.7% decline recorded earlier.
- The Reserve Bank of Australia decided to keep the Official Cash Rate (OCR) unchanged at 4.35% in its final policy meeting in December. RBA Governor Michele Bullock highlighted that while upside inflation risks have eased, they persist and require ongoing vigilance. The RBA will closely monitor all economic data, including employment figures, to guide future policy decisions.
- Australia's economy grew at its slowest annual pace since the pandemic in the third quarter. The OZ nation’s Gross Domestic Product (GDP) rose 0.3% in the September quarter, missing market forecasts of 0.4%. Weaker-than-expected GDP growth made markets almost fully price in a rate cut next April at 96% (from 73% before), according to Refinitive interest rate probabilities data.
- The Australian Dollar received support from improved sentiment and stimulus expectations from China. China’s leaders announced plans for proactive fiscal and looser monetary policies to accelerate domestic consumption in 2024. Weak Chinese CPI data (-0.6% in November, worse than expected) highlights challenges in the recovery but bolsters stimulus speculation.
Australian Dollar tests nine-day EMA after breaking above 0.6400
AUD/USD trades near 0.6410 on Thursday. The technical analysis of a daily chart indicates a strengthening bearish bias as the pair is confined within a descending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) remains below the 50 level, indicating sustained negative momentum.
On the downside, the yearly low of 0.6348, last seen on August 5, served as immediate support in the previous session. However, a break below this level could strengthen the bearish bias and push the AUD/USD pair toward the descending channel’s lower boundary around the 0.6200 level.
The AUD/USD pair faces an initial barrier around the nine-day Exponential Moving Average (EMA) at 0.6422, followed by the descending channel’s upper boundary at 0.6440 level. A decisive breakout above this channel could pave the way for a potential rally toward the seven-week high of 0.6687.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.14% | -0.26% | -0.09% | -0.57% | -0.30% | -0.07% | |
| EUR | 0.10% | -0.04% | -0.18% | 0.00% | -0.47% | -0.20% | 0.03% | |
| GBP | 0.14% | 0.04% | -0.10% | 0.04% | -0.43% | -0.16% | 0.07% | |
| JPY | 0.26% | 0.18% | 0.10% | 0.15% | -0.32% | -0.08% | 0.19% | |
| CAD | 0.09% | -0.01% | -0.04% | -0.15% | -0.47% | -0.21% | 0.03% | |
| AUD | 0.57% | 0.47% | 0.43% | 0.32% | 0.47% | 0.28% | 0.51% | |
| NZD | 0.30% | 0.20% | 0.16% | 0.08% | 0.21% | -0.28% | 0.24% | |
| CHF | 0.07% | -0.03% | -0.07% | -0.19% | -0.03% | -0.51% | -0.24% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds solid-Aussie jobs data-led gains above 0.6400
AUD/USD holds sizeable gains above 0.6400 early Thursday, capitalizing on stellar Australian jobs data, which pointed to a still resilient labour market and forced investors to scale back their bets for a rate cut by the RBA in February.
USD/JPY extends losses to near 152.00 amid risk-aversion, US Dollar retreat
USD/JPY drifts lower to near 152.00 in Thursday's Asian trading, snapping a three-day winning streak to a two-week high.The pair remains weighed down by a broad US Dollar pullback, risk-aversion and uncertainty around the BoJ rate hike next week. Focus shifts to US data.
Gold buyers take a breather ahead of US PPI inflation data
Gold's price seems to have paused its four-day recovery stint in Asian trading on Thursday after hitting fresh five-week highs near $2,725. Traders assess the odds of US Federal Reserve (Fed) interest rate cuts next year amid the ongoing upsurge in the US Treasury bond yields across curve.
Ripple's XRP could extend its rally to $4.75 after recent consolidation, rising profit-taking poses threat
Ripple's XRP continued its rally on Wednesday as it looks to test the upper boundary of a key flag channel. Following the recent price rise, investors booked profits worth nearly $800 million while options traders bet on the remittance-based token hitting the $5 mark.
BTC faces setback from Microsoft’s rejection
Bitcoin price hovers around $98,400 on Wednesday after declining 4.47% since Monday. Microsoft shareholders rejected the proposal to add Bitcoin to the company’s balance sheet on Tuesday.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.