The Australian Dollar Remains Steady Ahead of the NFP Report

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The Australian dollar was trading relatively steadily against most major currencies on Thursday, ahead of critical US employment data release later in the day.

The Australian dollar has rebounded and hit a 13-week high on Thursday, at 0.6845. The currency posted slight gains on December 2 and is currently trading at 0.6816.

The US nonfarm employment report is scheduled for release later, with a consensus of 200,000 for November. It is followed by a gain of 261,000 in October.

Surprisingly, the US employment market has been resilient. They are considering a sharp increase in interest rates.

On November 30, Powell sent the US dollar sharply lower in his speech. The comments made by Powell were not as hawkish as feared.

“More evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September,” said Powell.

This caused the US dollar to slump and pushed the Australian dollar higher. So even though the Australian economy is slowing, the currency has been posting small gains today.

Earlier this week, Reserve Bank of Australia Governor Lowe issued a shocking apology about the rate policy. Lowe admitted that the RBA had made a mistake in communicating about interest rates.

Lowe said, “It was regrettable that people listened to the RBA saying it wouldn’t raise rates before 2024 but then delivered seven oversized rate hikes in 2022. “

All this has caused a lot of anger and frustration among Australian homeowners. They are now struggling to make their mortgage payments. The RBA has since apologised for its mistake, but more is needed to help homeowners struggling to meet their payments.

The RBA meets next Tuesday and is widely expected to raise rates by 25 bp, bringing the cash rate to 3.10%. It will likely cause the Australian dollar to strengthen against most major currencies.

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