AUD / USD far from highs, but holding well above 0.7600

• AUD / USD has retraced from initial highs at the 0.7640 area, but remains well above 0.7600.
• A few positive developments from the AUD in Australia are helping, as well as the general risky mood in the market.

AUD / USD rose above the 0.7600 level for the first time since June 2018 on Thursday before hitting highs around 0.7640. Since then, the pair has trimmed some of these gains and is trading just below 0.7620, with the bulls for now keeping it well supported above the 0.7600 level.

Risk appetite keeps AUD offered

Risk-sensitive AUD is benefiting from the market’s broadly positive risk appetite; US stocks rose, with the S&P 500 and Nasdaq Composite indices hitting all-time highs on Thursday, crude oil markets rose, precious metals rose, and for the most part industrial metals, including iron ore (a key export). Australia), rose.

As for why the markets are in such a good mood; Although the Fed did not choose to increase the monthly pace of asset purchases or change the composition of those asset purchases at last night’s meeting, Fed Chairman Jerome Powell wanted to reassure market participants that The Fed’s ultra-accommodative monetary policy isn’t going anywhere anytime soon. Meanwhile, the latest news on the Brexit front suggests that the EU and the UK are closing a deal, potentially for the weekend, that would avoid what market participants see as a disastrous no-deal outcome at the end of the period. transition on December 31 and the leaders of the United States Congress appear to be on the verge of closing a deal on more tax aid from Covid-19.

Australian national factors also help

The AUD also received a tailwind from domestic factors during the Asia Pacific session on Thursday. First, Australia’s employment figures for November were much better than expected; The economy added 90,000 jobs (compared to expectations that it would add 50,000) and 84,200 of these were in full-time employment (which is a better sign of economic health given that full-time jobs tend to be better paid and more consistent in the long term). finished). Meanwhile, the unemployment rate fell to 6.8% against expectations that it would remain unchanged at 7.0%. Despite this drop in the unemployment rate, the participation rate went from 65.8% to 66.1% (compared to expectations that it will rise to 66.0%).

ANZ notes that 74,000 of the 90,000 title gain came from Victoria alone. In terms of the outlook for the Australian labor market, a “number of leading labor market indicators have improved rapidly, including ANZ job announcements, suggesting that the job recovery should continue into early 2021,” the bank says. .