Chart of the day - AUDUSD (17.10.2024)

• The strong labor market decreased market expectations that the Reserve Bank of Australia (RBA) would lower interest rates, as maintaining higher rates may be necessary to manage inflationary pressures.

• In response to the positive employment data, the AUDUSD pair increased by approximately 0.70%, reaching around 0.6710 USD.

• Financial investors are recalibrating their outlook, reducing the likelihood of near-term monetary easing by the RBA due to sustained employment growth.

The Australian labor market showed surprising resilience in September 2024, with employment surging by 64,100 - more than double the anticipated 25,000 increase. The unemployment rate held steady at 4.1%, maintaining its position over the past six months, while the participation rate climbed to a record high of 67.2%. These robust figures underscore a tightening labor market, contributing to the Australian dollar's strength in currency markets. The unemployment rate remained steady at 4.1%, consistent with its level around 4.0-4.2% over the past six months, indicating a stable and tight labor market. The participation rate climbed to a record high of 67.2%, suggesting that more individuals are entering the workforce and successfully securing employment. 

• Employment rose by 64,100 in September 2024, more than double the forecasted increase of 25,000.
• Increased by 51,600, showing significant growth in stable, full-time positions.
• Unemployment Rate remained steady at 4.1%, consistent over the past six months, indicating a stable labor market.
• Participation Rate climbed to a record high of 67.2%, suggesting more individuals are entering the workforce.

AUDUSD (D1 interval)

In reaction to the strong employment data, the Australian dollar experienced a significant appreciation. The AUDUSD pair climbed approximately 0.70%, reaching around 0.6710 USD. This upward movement reflects investor sentiment that the RBA may delay interest rate cuts, given the robust labor market and its potentially pro-inflationary effect. Following the release of the data, AUD remains the strongest currency among the G10 currencies gaining between 0.40-0.60%.

Source: xStation 5