AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Dollar Boosted by Strong Recovery in Jobs Market

The Australian and New Zealand Dollars are trading higher on Thursday with both commodity-linked currencies seemingly poised to resume their uptrends after a nearly three week pause. Helping to boost the Aussie and Kiwi is a weaker U.S. Dollar which is declining across the board against major peers as plans for a massive U.S. stimulus package fueled market optimism and sapped demand for safe-have currencies.

At 11:09 GMT, the AUD/USD is trading .7771, up 0.0025 or +0.32% and the NZD/USD is at .7212, up 0.0041 or +0.57%.

Many analysts expect the dollar to continue its downtrend, which saw it lose nearly 7% in 2020 amid ultra-loose U.S. monetary policy and hopes for a post-pandemic global recovery.

In economic news, the Aussie Dollar rose after a report released on Thursday showed Australia boasted another solid rise in employment in December.

Australia Unemployment Falls to 6.6% as Recovery Strengthens

On Thursday, Bloomberg reported that Australian unemployment fell in December as a big-spending government budget and a second round of central bank stimulus spurred the economy’s recovery and encouraged firms to keep hiring.

The jobless rate declined to 6.6% from 6.8% in November, beating economists’ median estimate of 6.7%, data from the statistics bureau showed Thursday in Sydney. Employment advanced by 50,000 in December, matching estimates, as did the participation rate at 66.2%.

Australia’s recovery is bolstered by the authorities’ ability to contain the virus – even accounting for recent isolated outbreaks – boosting confidence and encouraging cashed-up households to spend. That’s prompted firms to resume hiring and Australian’s to return to the labor force, tempering the impact on unemployment as participation swells, according to Bloomberg.

Among other details in today’s jobs report:

  • Monthly hours worked increased by 0.1% in December, while declining by 1.5% over the year.
  • Under-employment fell by 0.8 percentage points to 8.5% and under-utilization decreased by 1.1 percentage points to 15.1%.
  • Full-time jobs advanced 35,700 and part-time roles gained 14,300

What Bloomberg Economics Says…

“Australia’s unemployment rate may have peaked as the labor market continues to heal from the damages wrought by the pandemic. Labor force participation hit a record high in December, as employment and hours worked recovered further,” said James McIntyre, economist.

Daily Forecast

Australia’s employment data was solid news. Its economy has now recovered 90% of the number of jobs lost during the pandemic.

The focus for traders now shifts to New Zealand’s consumer inflation report, due to be released at 21:45 GMT. The report is expected to show an increase of 0.2%, down from the previously reported 0.7%.

Overall, the resumption of the rally is being driven by increased demand for risky assets, a dip in U.S. Treasury yields and a weaker U.S. Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.