The Australian Dollar (AUD) gained ground against the US Dollar (USD) on Thursday, extending its gains for the second consecutive day. The AUD/USD pair appreciated as the Australian Dollar received support following the release of improved employment data from Australia.
The Australian Bureau of Statistics (ABS) reported on Thursday that the unemployment rate declined to 4.3% in October from 4.5% in September, beating market expectations of 4.4%. Additionally, Employment Change surged to 42.2K in October, up from a revised 12.8K in September (previously 14.9K), significantly exceeding the forecast of 20K.
Full-time employment increased by 55.3K in October, a notable rise from the 6.5K gain recorded in the prior month (revised from 8.7K). The participation rate remained steady at 67%, while part-time employment decreased by 13.1K, reversing from an increase of 6.3K in September.
The AUD also found support amid cautious sentiment surrounding the Reserve Bank of Australia (RBA) policy outlook. RBA Deputy Governor Andrew Hauser stated on Wednesday, “Our best estimate is that monetary policy remains restrictive, though the committee continues to debate this.” He added that if monetary policy is no longer mildly restrictive, it would have significant implications for future decisions.
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**US Dollar Advances on Hopeful Signs of Government Shutdown Ending**
The US Dollar Index (DXY), which measures the USD against six major currencies, extended gains for the second straight session, trading around 99.60 at the time of writing. The Greenback’s advance was fueled by growing optimism that the prolonged US government shutdown could be resolved this week.
On Wednesday, the House of Representatives voted 222 to 209 to approve a funding package aimed at ending the longest government shutdown in US history. The bill now awaits President Donald Trump’s signature. Earlier in the week, President Trump endorsed the bipartisan deal to end the shutdown.
In related news, President Trump forecasted that inflation will reach 1.5% “pretty soon,” a level the US economy has not seen since February 2021. This 1.5% inflation rate is well below the long-term average inflation for the United States over the past decade.
However, White House Press Secretary Karoline Leavitt warned that October’s jobs and inflation data reports are unlikely to be released due to the ongoing government shutdown.
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**Labor Market and Global Developments**
On Tuesday, Automatic Data Processing (ADP) reported a US Employment Change showing an average weekly job loss of 11,250 for the four weeks ending October 25. The weaker-than-expected private labor data increased speculation about potential Federal Reserve policy easing.
Meanwhile, China’s Ministry of Commerce announced on Monday a temporary suspension of its export ban on “dual-use items” related to gallium, germanium, antimony, and super-hard materials to the US. This suspension took effect on Sunday and will remain until November 27, 2026. Given China’s role as Australia’s major trading partner, any shifts in the Chinese economy could impact the AUD.
The National Bureau of Statistics of China reported on Sunday that the Consumer Price Index (CPI) rose 0.2% year-over-year in October, rebounding after a 0.3% decline in September. The market had expected zero growth. Month-over-month CPI inflation increased by 0.2%, up from 0.1% previously. The Producer Price Index (PPI) fell 2.1% year-over-year in October, a slightly better outcome than the 2.3% decline in September and beating the consensus estimate of -2.2%.
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**Australian Consumer Confidence Strengthens**
The University of Melbourne released data on Tuesday showing Australia’s Westpac Consumer Confidence jumped 12.8% in November to 103.8. This marks the first time since February 2022 that confidence has surpassed 100. The rebound follows a 3.5% decline in October and represents the strongest reading outside of the pandemic period in seven years. The rise was driven by improving economic conditions and easing external risks.
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**Technical Outlook: AUD/USD Eyes Rectangle’s Upper Boundary**
On Thursday, the AUD/USD pair traded around 0.6560. The daily chart suggests the pair is consolidating within a rectangular range, indicating sideways movement. However, the pair remains above the nine-day Exponential Moving Average (EMA), signaling firm short-term bullish momentum.
If the AUD/USD breaks above the rectangle’s upper boundary near 0.6630, it could confirm a bullish bias and support a test of the 13-month high of 0.6707, recorded on September 17.
On the downside, immediate support is found at the 50-day EMA of 0.6537, followed closely by the nine-day EMA at 0.6531. A break below these levels could weaken both medium- and short-term momentum, pushing the pair towards the rectangle’s lower boundary around 0.6470, and potentially further down to the five-month low of 0.6414 from August 21.
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**Summary**
– Australian employment data beats expectations, supporting AUD gains
– US government shutdown nearing resolution, boosting USD sentiment
– Weak US labor data increases odds of Fed easing
– China lifts some export bans, potentially affecting trade dynamics
– Australian consumer confidence reaches highest level in seven years
– AUD/USD consolidates with bullish momentum and a key breakout level at 0.6630
Investors will be closely watching upcoming economic reports and geopolitical developments to gauge further direction for the AUD/USD pair in the near term.
https://bitcoinethereumnews.com/finance/australian-dollar-rises-on-upbeat-labor-market-data/