The Aussie lost ground against the greenback yesterday following the release of unexpectedly weak Australian employment change data for December. The overwhelmingly positive US employment and building permits data also enabled the US dollar to consolidate its gains. Overall, the AUD/USD pair declined from a high of 0.6730 to a low of 0.6530 in the past 24 hours.
According to the Australian Bureau of Statistics, the country’s economy lost 65,100 jobs in December following an addition of 72,600 jobs in the previous month and missed forecasts of 15,400 job additions.
The unemployment rate was 3.90% in December, unchanged from the previous month and in line with economists’ estimates.
Notably, the participation rate fell to 66.80% from 67.30%. The number of employed people was 14, 201,100 in December, down from 14,266,200 in the previous month. The underemployment rate stood unchanged at 6.50% in December. Additionally, monthly hours worked fell by 10 million to 1,936 million in the same period.
According to the US Department of Labor, the US unemployment claims fell to 187,000 in the week ending January 13 from 203,000 (upwardly revised from 202,000) in the previous week and bettered forecasts of 206,000 jobless claims. The reported figure is the lowest level since September 24, 2022, when there were 182,000 claims.
The four-week average was 203,250, down from 208,000 (upwardly revised from 207,750) in the previous week.
According to the US Census Bureau, the country’s building permits increased to 1,495,000 units in December from 1,467,000 units in November and greater than forecasts of 1,470,000 units. The reported figure is 6.10% higher than the December 2022 rate of 1,409,000 units.
The Census Bureau also stated that housing starts declined to 1,460,000 units in December from 1,525,000 units in November but surpassed forecasts of 1,430,000 units. The reported figure is 7.60% higher than the December 2022 rate of 1,357,000 units.
The Philly Fed manufacturing index improved to -10.60 in January from -12.80 in December but failed to meet the market’s expectations of -6.60. The reported figure reflects the 18th negative reading in the last 20 months.
The fresh orders index improved to -17.90 in January from -22.10. The shipments index grew to -6.20 from -11.20. The employment index inched up by less than one point to -1.80 in January. The future general activity index declined to -4 in January, reflecting the lowest reading since May, from 12.60 in December.
The weak Australian employment data is expected to keep the AUD/USD pair slightly bearish in the short term.
The historical price chart indicates that the AUD/USD pair is declining after facing resistance at 0.6730. The next major support is anticipated to be only near 0.6400. Additionally, the currency pair is trading below its 50-day moving average, while the stochastic indicator is in the bearish zone. Therefore, we anticipate the AUD/USD pair to remain in a downtrend in the near term.
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