AUD / USD just below the 0.7750 level ahead of key jobs data

• AUD / USD is range bound just below the 0.7750 level ahead of the December employment data release at 00:30 GMT.
• AUD / USD is on the rise, in line with other risk-sensitive currencies like CAD and NZD.
• The Australian dollar has benefited from risk appetite that sent major US stock exchanges to all-time highs.

He AUD/USD has posted a rise, in line with other risk-sensitive currencies such as the CAD and the NZD (the former of which received a boost from a less dovish-than-expected result in the BoC’s monetary policy decision) on Wednesday, recovering from Asian session lows below 0.7700 to current levels slightly below 0.7750. The pair managed to briefly rise to the level of 0.7760, but could not hold at these levels for long. At the time of writing, the AUD / USD is up 0.7% or more than 50 pips on the day.

AUD has benefited from risk appetite That sent major US stock exchanges to record highs, driven primarily by gains in tech stocks, and also pushed up the prices of most commodities. However, markets do not fit the typical description of risk appetite, as the DXY dollar index remains flat (normally under risk appetite conditions it would move lower), small-cap stocks and Prices have fallen (not what you would normally see on a day driven by “stimulus hopes”) and crude oil is flat.

It’s been a bit of a strange day and therefore it’s difficult to pin down exactly what has been driving the sentiment. The key fundamental news of the day is, of course, the end of the Trump era and the beginning of Joe Biden’s first term as president of the United States. The inauguration passed without any drama and did not move markets. Much more interesting from a market perspective remains what US Treasury Secretary candidate Janet Yellen said in her testimony before Congress on Tuesday. Yellen called for unprecedented levels of stimulus spending, backing the $ 1.9 trillion rescue package of President Biden and the subsequent recovery package.

If the Biden administration can deliver on its promises regarding the stimulus (debatable as to how much of that initial $ 1.9 trillion package it is going to get Congress to pass), then This is expected to boost the US economy, which is likely to follow the world economy later by boosting demand for US imports. Australia is shaping up to be one of the big beneficiaries of a stronger pickup in global growth and trade conditions, not to mention it will also benefit from any additional commodity price inflation triggered by the US stimulus. Most analysts expect the AUD’s path to continue higher in the coming months.

Employment in Australia

The most important Australian data release of the month December Monthly Employment Report will be released at 00: 30GMT. Market expectations are that add 50,000 jobs to the Australian economy in December, which will slightly lower the unemployment rate to 6.7% from 6.8% and raise the participation rate slightly to 66.2% from 66.1%. That would bring the unemployment rate to its lowest level since June 2020, although it would still leave it substantially above its pre-Covid-19 levels of close to 5.0%.

On the contrary, if the participation rate is as expected, it would once again equal the highest level of all time recorded in September 2019 and mark an impressive recovery from the brief drop below 63% immediately after the start of the pandemic. global. As always, it will also be worth looking at how much of the number of top jobs is made up of increases in full-time versus part-time jobs, with more of the former being seen as a better indication of economic strength.

AUD / USD technical levels