- AUD/USD stretches southward journey to near 0.6900 as Australian labor market shrinks.
- The Australian economy reported layoffs in December. The unemployment rate he rose to 3.5%.
- Investor risk appetite is further declining as S&P 500 futures continue their downtrend.
The AUD/USD pair extended its downtrend to near 0.6900 as the Australian Bureau of Statistics reported weaker than expected employment (December) data. The Australian labor market was expected to add 22.5K new jobs while 14.6K employees were laid off. Also, the unemployment rate he rose to 3.5%. 3.4% vs. forecast and previous release.
Undoubtedly, rising unemployment is bad for the Australian economy, but it should give the Reserve Bank of Australia (RBA) some comfort. RBA Governor Philip Lowe has raised his Official Cash Rate (OCR) to his 3.10% in the fight against stubborn inflation. This seems to be starting to affect the labor market.
The Australian Property Investors (API) news report claimed Wednesday: Rate increases may soon wane. They added that the continued rise in household spending, which rose by 11.4% in November, was responsible for the rise in interest rates.
The Australian dollar has been hit by weak employment data and declining demand for risk-aware assets. S&P 500 futures fell again after a bearish Wednesday, further reducing investor risk appetite. Increasing traction on the theme of risk aversion is supporting US Treasury yields. The 10-year US Treasury bond returned him over 3.38%.