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Australian Dollar gathers momentum on strong job numbers

AUD - Australian Dollar

The Australian Dollar opens higher this morning and finds itself up 30-pips from this time yesterday when valued against its US counterpart. Moving off lows of 0.6848 following upbeat local jobs data, buyers were keen to keep the momentum going which saw the AUD/USD touch an eventual high of 0.6888 during the European session.

Data from Australian Bureau of Statistics saw the economy adding 39,000 jobs in November vs an expected 15,000 and the unemployment rate dropping to 5.2 per cent from 5.3 per cent. The numbers demonstrate the continued strength and resilience of the Australian economy said treasurer Josh Frydenberg and reduces the pressure on the RBA to cut rates in its next meeting in February.

This morning we open at 0.6886 at the time of writing, and can expect to see initial support at 0.6840 and 0.6800 in the downside. On the flip side, strong resistance is sitting at 0.6906. Looking ahead, there are no local scheduled releases and only some low tier pieces out of the US and Europe.

Key Movers

Following the post-election rally the Pound has lost pretty much all gains against the Greenback and we find it 3% lower and on a continued downward journey hovering at 1.3013 at the time of writing. The main driver yesterday was on the back of Bank of England and its monetary policy decision, they opted to leave rates on hold but we see two policymakers continuing to push for a lower interest rates. The risk of a 2020 rate cut lingers to the detriment of the GBP exchange rate.

Over in the US Donald Trump has become the third president to be impeached, he has been accused of abusing his power, extorting Ukraine to help Trump’s campaign by fabricating smears about his potential political opponent and withholding US assistance from Ukraine until the campaign help was received. What next, the trial will begin in January whether to convict and remove Trump from office, as prescribed in the constitution.

In other news, the Bank of Japan kept their policy rate steady in line with the ECB and US federal Reserve, siting that they will likely be in a holding pattern for some time. As widely expected, the BOJ maintained its short-term interest rate target at -0.1 per cent and that for 10-year government bond yields around 0 per cent.

Expected Ranges

AUD/USD: 0.6830 - 0.6930 ▲

GBP/AUD: 1.8700 - 1.9000 ▼

AUD/NZD: 1.0360 - 1.0480 ▼

AUD/EUR: 0.6140 - 0.6240 ▲

AUD/CAD: 0.8970 - 0.9120 ▼