AUD/USD Little Changed Despite Employment Beating Expectations
- AUD/USD little changed after employment figures crossed the wires
- Australia lost 1k jobs vs -10k expected, unemployment remains 5.8%
- The next Reserve Bank of Australia rate decision is on February 2nd
The Australian Dollar showed a tepid response against the US Dollar after December’s employment report crossed the wires. Australia lost 1k employees compared to the -10k forecast. This was the most amount of jobs lost over the course of one month since April 2015.
The majority of the losses came from part-time figures (-18k). The same category saw a -2.1k revision for the November data. The decline in part-time employment was mostly offset by the full-time positions, which saw Australia adding 17.6k jobs to the economy. Meanwhile, the participation rate decreased to 65.1 percent from 65.3 in November. The unemployment rate remained unchanged at 5.8 percent, beating the 5.9 percent consensus forecast.
As mentioned in RBA’s Statement of Monetary Policy for November 2015, the Australian labor market has benefited from job growth in the retail and service sectors offsetting job losses from the mining and commodities related sectors. With commodities continuing lower, the upcoming Reserve Bank of Australia interest rate decision on February 2nd could be important. The central bank might give an outlook on its position for employment with regards to global headwinds and domestic services demand. December's figures may offer a mixed signal to RBA’s data-dependent monetary policy outlook. Overnight index swaps are pricing in a 16 percent probability of an interest rate cut at its next meeting.