Despite a challenging Chinese economic outlook, the Australian labor market has shown resilience, with expectations of adding 20,000 jobs in September following the addition of 64,900 jobs in August. This comes amidst the Reserve Bank of Australia’s (RBA) decade-high interest rate of 4.1%, and a year that has seen over 410,000 jobs added despite high interest rates and strong US economic data leading to high US Treasury yields.
The unemployment and participation rates are forecasted to remain steady at 3.7% and 67%, respectively. However, the pair is trading near its yearly lows due to these factors as well as bearish pressure.
According to recent minutes from the RBA, there is a low tolerance for slower inflation return. If labor market conditions remain positive and quarterly inflation data shows improvement, the RBA may consider a rate hike at its upcoming meeting on November 7. Such a move could have significant implications for the economy.
As for the AUD/USD pair, it needs to consolidate above the 0.6380 point to alleviate bearish pressure. A weekly close above 0.6540 could suggest a bottoming out, while a break below 0.6280 could lead to last year’s low of 0.6170.
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