Forex News: Australian Dollar Advances On Robust Employment Data

Australian Dollar Advances On Robust Employment Data

(RTTNews) - The Australian dollar strengthened against some major counterparts in the Asian session on Thursday, after data showed that the Australia's unemployment rate dropped in July and employment increased sharply, suggesting that the labor market conditions remain strong.

Data from the Australian Bureau of Statistics showed that the jobless rate in Australia came in at 4.2 percent in July compared to 4.3 percent in June, which was the highest since late 2021. The 4.2 percent matched economists' expectations.

Employment increased by 24,500 from the previous month to 14.64 million. Economists were expecting a monthly increase of 25,300.

At the same time, the number of unemployed decreased by 10,200 from a month ago to 649,00. The participation rate held steady at 67.0 percent in July, slightly below forecast of 67.1 percent.

Asian stock markets traded higher on continued optimism over the outlook for interest rates, with the US Fed widely expected to lower rates by a least a quarter point next month.

U.S. Treasury Secretary Scott Bessent wants the Fed to keep the door open to a larger, 50 basis point rate cut next month following recent weak US jobs data.

CME Group's FedWatch Tool is currently indicating a 93.8 percent chance the Fed will cut rates by 25 basis points in September.

US President Donald Trump also continues to pressure Fed Chair Jerome Powell to lower rates and recently threatened to allow a "major lawsuit" to proceed against him over renovations at the Fed's headquarters.

In the Asian trading today, the Australian dollar rose to a 2-day high of 1.7834 against the euro, from yesterday's closing value of 1.7879. The aussie may test resistance around the 1.75 region.

Against the U.S. and the Canadian dollars, the aussie advanced to more than a 2-week high of 0.6569 and a 3-month high of 0.9028 from Wednesday's closing quotes of 0.6551 and 0.9008, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.67 against the greenback and 0.91 against the loonie.

The aussie edged up to 1.0970 against the NZ dollar, from yesterday's closing value of 1.0955. On the upside, 1.10 is seen as the next resistance level for the aussie.

Meanwhile, the aussie fell to a 6-day low of 95.88 against the yen, from yesterday's closing value of 96.38. The aussie may test support near the 94.00 region.

Looking ahead, Eurostat publishes euro area flash GDP and employment figures for the second quarter are due to be released at 5:00 am ET in the European session. The preliminary flash estimate showed that the currency bloc grew 0.1 percent after rising 0.6 percent in the first quarter.

In the New York session, U.K. NIESR monthly GDP tracker for July, U.S. PPI data for July and weekly jobless claims data are slated for release.

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