The Australian dollar got its boost last week from an excellent jobs report. The gain of over 60K jobs sent it much higher, saving AUD/USD from a downfall below the 0.75 level. And now, the most recent data maintain its high range, which is narrowing and zeroing in on 0.7610.
The Reserve Bank of Australia released its meeting minutes from the latest meeting held earlier in the month. As Phillip Lowe and his team take a break in January, this should have been a more meaningful publication. However, the RBA didn’t rock the boat too much.
As usual, the RBA stated that a further rise in the value of the Australian dollar would hurt the economy. This may sound severe and could hurt the A$, but it isn’t news. They also noted that the exchange rate is similar to that seen in the past 2.5 years.
They do worry about the slow rise in income, aka wages. This is a global phenomenon. In addition, they mentioned that the housing market has generally eased, especially in the hottest market, Sydney.
On the upside, the Canberra based institution says that recent data has increased their confidence that employment and inflation would rise and also said that there are positive signs for the non-mining sectors. It seems that Australia is managing its transition away from the resources sector.
AUD/USD is trading between resistance at 0.7695 and support at 0.7640. Yet as the chart shows, the pair is hugging the 0.7670 level and not letting go. In case of a breakout to the upside, 0.7730 is in the next cap. Downside support is at 0.7595.
More: AUD: 2 Key Drivers To Continue Undermining AUD; What’s The Trade? – Nomura