Aussie Weakens, But Why Is It Still Hard to Drop?
AUD/USD fell in the Asian session on Thursday, eroding some of the previous day's sharp gains that had taken the pair to its highest level since September 17th. Currently, the price is holding slightly above the 0.66 mid-range, still with a negative bias following the release of mixed Australian jobs data. This weakness suggests the market is still digesting conflicting signals between the stable headline unemployment figure and the sharp decline in the number of employed people.
Data from the Australian Bureau of Statistics (ABS) showed the Unemployment Rate remained at 4.3% in November, better than expectations for a rise to 4.4%. However, this positive trend was offset by a 21.3,000 decline in the number of employed people, reversing from the 41.1,000 increase in October and well below the 20,000 increase expected. This combination weakened the Aussie as the market saw signs of fragility in the labor market, putting AUD/USD under selling pressure, although the correction was still measured.
On the policy front, the RBA's continued hawkish tone has acted as a buffer preventing further declines in the AUD/USD. RBA Governor Michele Bullock previously confirmed that the board had discussed scenarios where interest rates would need to be raised again, and that no further cuts are currently seen. This contrasts with the Fed's recent dovish cut, suggesting that policy divergence could potentially provide a foothold for the Aussie, especially if selling pressure begins to ease.
Meanwhile, the Dollar Index (DXY) slumped near its lowest level since late October after the Fed cut rates by 25 basis points and projected only one more cut in 2026. However, Powell's comments about downside risks in the labor market have kept market participants betting on the possibility of additional cuts. This risk-on sentiment and dollar weakness helped contain pressure on the AUD, so any further decline in AUD/USD could potentially still be seen as a buying opportunity on dips by market participants who believe the combination of a relatively hawkish RBA and a fragile USD could lift the Aussie again in the coming sessions. (asd)
Source: Newsmaker.id
