The Aussie fell against the greenback in the Asian session yesterday following the RBA’s lower-than-anticipated rate hike announcement. However, in the US session, the Aussie recovered the lost ground following reports of an unexpectedly sharp decline in JOLTS job openings. The Aussie’s recovery was also stoked up by an unexpected surge in Australia’s building approval data for August. Overall, the AUD/USD pair has traded in a range of 0.6450 and 0.6547 in the past 24 hours.
According to the Australian Bureau of Statistics, the country’s building approvals rebounded with a growth of 28.10% m-o-m in August, after an 18.20% decline in the prior month, and surpassed the 10.20% rise anticipated by economists.
The aggregate number of dwellings approved declined 0.20% in August, following a 0.40% increase in July.
The private sector’s house approvals grew by 4.10% in August to 10,459 units, following a 0.80% rise in July. Private sector dwellings, devoid of houses approved, increased 99.10% in August, following a 45.80% decline in July, the lowest level posted since January 2012.
The trend estimate for private sector hour approvals increased 0.90% in August, matching the growth rate in July. Private sector dwellings, devoid of houses, declined 1.30%, following a 0.30% rise.
The country’s central bank (the Reserve Bank of Australia) announced a rate hike of 25 basis points to 2.60%, lower than market expectations for a rate hike of 50 basis points. The RBA pointed out that cash rates have increased considerably, but further rate hikes would still be necessary to control inflation. Furthermore, RBA Governor Lowe highlighted the worsening global economic outlook as the main reason for lower rate hikes. The rate hike is the sixth in as many months. Notably, it includes four 50-basis-point rate hikes.
Interestingly, the RBA had recently signaled that it would likely slow down the pace of rate hikes, but the market continued to bet on steep rate hikes primarily due to the hawkish Fed rate hike in September.
According to the Job Openings and Labor Turnover Survey (JOLTS) survey published by the US Bureau of Labor Statistics, the country’s job openings declined to 10.05 million in August from 11.17 million in the prior month. The reported figure, which is the lowest since June 2021, missed forecasts of 11.07 million job openings. The rate of job openings fell to 6.20%.
Health care and social assistance recorded a drop of 236,000 jobs. Other services posted a decrease of 183,000 jobs. The retail trade reported a decline of 143,000 jobs.
Also, the number of hires remained unaltered at 6.30 million, while the rate stood unchanged at 4.10%. Hires fell by 8,000 in the federal government. Additionally, the job openings rate fell across all categories (based on size) of firms barring the ones with an employee count of 9 or lower.
Furthermore, in a news release, the Census Bureau stated that US factory orders remained unaltered in August, following a 1% decline in the prior month and in line with economists’ estimates.
The lower-than-anticipated rate hike by the RBA and the weak JOLTS data are expected to keep the AUD/USD pair range-bound in the short term.
The historical price chart indicates that the AUD/USD pair is rising after testing the support at 0.6437. The next resistance level is anticipated only near 0.6657. Additionally, the currency pair is trading above its 50-day moving average while the momentum indicator is rising. Therefore, we anticipate the currency pair to remain in an uptrend in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
