Aussie Extends Gains On Firm Jobs Data

The Australian dollar extends gains after December jobs report shows a deeper than expected decline in the unemployment rate. The jobless rate dropped to 4.2% from 4.6% recorded in November, printing below the median estimate of 4.3% and hitting the lowest point since Aug 2008. Employment grew slightly faster than forecast, which was mostly driven by full-time positions, albeit participation remained unchanged at 66.1%, narrowly missing the consensus forecast of 66.2%.

• The ABS flag that "the latest data shows further recovery in employment following the large 366,000 increase in November. This provides an indication of the state of the labour market in the first two weeks of December, before the large increase in COVID cases later in the month"
• The data should be taken with a pinch of salt, as the ABS remind that "the December survey reference period was 28 November to 11 December 2021, which was prior to the high number of COVID cases associated with the Omicron variant."
• AUD/USD trades +18 pips at $0.7229 as we type, with the Aussie comfortably outperforming its G10 peers. Familiar technical levels remain in play.
• AUD/NZD has added 41 pips and sits at NZ$1.0670, after hitting levels not seen since Jul 14 last year. A break above the NZ$1.0700 mark would bring Jul 13, 2021 high of NZ$1.0740 into view.