Fall In Jobless Rate, Fiscal Stimulus Hopes Lift Australian Dollar

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The Australian dollar firmed against its major counterparts in the Asian session on Thursday, as the nation’s unemployment rate fell in December and on hopes of fiscal support from the Biden administration to boost the economy.

Data from the Australian Bureau of Statistics showed that Australia’s jobless rate dropped a seasonally adjusted 6.6 percent in December.

That was below expectations for 6.7 percent and down from 6.8 percent in November.

The Australian economy added 50,000 jobs last month, in line with expectations following the addition of 90,000 jobs in the previous month.

Asian stock markets are mostly higher following the record closing highs overnight on Wall Street amid hopes that the Biden administration’s economic stimulus will revive growth in the world’s largest economy.

The aussie climbed to 6-day highs of 0.7777 against the greenback and 80.52 against the yen, off its early lows of 0.7743 and 80.13, respectively. The aussie is likely to challenge resistance around 0.80 against the greenback and 82.00 against the yen.

After falling to 1.5632 at 6:00 pm ET, the aussie jumped to a 1-week high of 1.5597 against the euro. On the upside, 1.00 is likely seen as its next resistance level.

The aussie edged up to 0.9810 against the loonie and 1.0805 against the kiwi, reversing from its early low of 0.9777 and a 2-day low of 1.0782, respectively. If the aussie rises further, it may find resistance around 1.00 against the loonie and 1.09 against the kiwi.

Looking ahead, the European Central Bank will announce interest rate decision at 7:45 am ET. The ECB is expected to hold its main refi rate at a record low zero percent and the deposit rate at -0.50 percent.

Canada new housing price index for December, U.S. weekly jobless claims for the week ended January 16 and housing starts and building permits for December are due out in the New York session.

Eurozone flash consumer sentiment index for January is set for release at 10:00 am ET.

The material has been provided by InstaForex Company – www.instaforex.com

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