Forex News
- Silver price retraces to near $62.00 after posting a fresh all-time high around $62.87.
- The Fed sees only one interest rate cut in 2026.
- The US Dollar Index strives to regain ground after refreshing seven-week low near 98.50
Silver Price (XAG/USD) retraces to near $62.00 during the Asian trading session on Thursday after posting a fresh all-time high at $62.87 earlier in the day. The white metal’s rally hits a temporary roadblock, while its outlook remain firm as the Federal Reserve (Fed) keeps the door open for further monetary easing after reducing interest rates by 25 basis points (bps) to 3.50%-3.75% on Wednesday.
In the policy meeting, the Fed stated that extent and timing of additional adjustments to the target range for Federal funds rates will be dependent on incoming data. On the contrary, market participants anticipated that the Fed might announce it is done with reducing interest rates as inflationary pressures have remained well above the 2% target.
However, Fed Chairman Jerome Powell said in his press conference that the bar for further interest rate cuts is very high.
The Fed’s dot plot showed that policymakers collectively see the Federal Fund Rate heading to 3.4% by the end of 2026, suggesting that there will be one interest rate cut next year.
Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.
Meanwhile, the US Dollar (USD) strives to regain ground after sliding vertically, following the Fed’s monetary policy announcement. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks up to near 98.70 after refreshing seven-week low at open around 98.50.
Silver technical analysis
XAG/USD trades higher at $62.00 during Thursday's Asian trading hours. The 20-day Exponential Moving Average (EMA) climbs to $56.24, underscoring a firm uptrend with price comfortably above trend support. The 20-day EMA has steepened in recent sessions, reinforcing bullish control.
The 14-day Relative Strength Index (RSI) at 76.52 is elevated, signaling strong momentum near overbought territory.
The bias stays upward while the 20-day EMA rises and continues to underpin pullbacks. RSI remains strong and above the 70 mark, which could prompt a brief consolidation before the next leg higher. A sustained close above $63.00 would keep topside pressure intact, while dips holding above the average would preserve the advance.
(The technical analysis of this story was written with the help of an AI tool)
- The Japanese Yen scales higher against a bearish USD for the second straight day on Thursday.
- The divergent BoJ-Fed policy outlooks turn out to be a key factor benefiting the lower-yielding JPY.
- Japan’s fiscal and growth concerns could cap the upside for the JPY amid a positive risk tone.
The Japanese Yen (JPY) builds on the previous day's strong move up against a broadly weaker US Dollar (USD) and gains some follow-through positive traction for the second straight day on Thursday. A shift in rhetoric from Bank of Japan (BoJ) Governor Kazuo Ueda, saying that the central bank is drawing closer to sustainably achieving the 2% annual inflation target, lifted bets for an imminent rate hike as early as next week. This marks a significant divergence in comparison to the US Federal Reserve's (Fed) dovish rate cut on Wednesday, which is seen undermining the Greenback and turning out to be a key factor behind the JPY's relative outperformance.
Meanwhile, expanded fiscal spending under Prime Minister Sanae Takaichi’s administration has exacerbated concerns about Japan's public finances. This, along with a generally positive tone around the equity markets, could act as a headwind for the safe-haven JPY. Bullish traders might also refrain from placing aggressive bets around the JPY and opt to wait for more cues about the BoJ's policy tightening path. Hence, the focus remains on the outcome of the December 18-19 BoJ policy meeting, which will influence the near-term JPY price dynamics. Heading into the key central bank event risk, the fundamental backdrop might continue to support the JPY.
Japanese Yen continues to draw some support from hawkish BoJ expectations
- Bank of Japan Governor Kazuo Ueda reiterated earlier this week that the likelihood of the central bank's baseline economic and price outlook materialising had been gradually increasing.
- Moreover, Wednesday's release of the Corporate Goods Price Index indicated that inflation in Japan remains above the historic levels and backs the case for a further BoJ policy normalization.
- The market is now actively pricing in the possibility of a BoJ rate hike as early as next week, which marks a big divergence in comparison to the US Federal Reserve's dovish interest rate cut.
- The US central bank, in a widely expected move, lowered interest rates at the end of a two-day meeting on Wednesday and projected one more quarter-percentage-point rate cut in 2026.
- Meanwhile, Fed Chair Jerome Powell told reporters that the US labor market has significant downside risks and that the central bank does not want its policy to push down on job creation.
- Traders were quick to react and are now pricing in two more rate cuts by the Fed in 2026. This keeps the US Dollar depressed and continues to underpin the lower-yielding Japanese Yen.
- Investors remain worried about Japan's deteriorating fiscal condition amid Prime Minister Sanae Takaichi's reflationary push and massive spending plan to boost sluggish economic growth.
- In fact, the revised Gross Domestic Product report showed that Japan's economy shrank 0.6% in the July-September period and by 2.3% on a yearly basis, or its fastest pace since Q3 2023.
- This, however, was offset by expectations that higher wages will increase household purchasing power and boost spending, which should fuel demand-driven inflation and bolster the economy.
- Traders now look to the release of the usual US Weekly Initial Jobless Claims, which, along with the US Trade Balance data, could provide some impetus to the USD and the USD/JPY pair.
USD/JPY could find support near the descending channel hurdle breakpoint, around 155.35
An intraday breakdown below the 156.00 mark and the 100-hour Simple Moving Average (SMA) backs the case for further losses amid negative oscillators on hourly charts. That said, technical indicators on the daily chart are holding in positive territory and suggest that any further decline is more likely to attract some buyers near the 155.35-155.30 hurdle breakpoint. The latter represented the top boundary of a short-term trading range and should act as a key pivotal point. Some follow-through selling, leading to a subsequent fall below the 155.00 psychological mark, might shift the near-term bias in favor of the USD/JPY bears.
On the flip side, a sustained strength back above the 156.00 mark could lift spot prices to the 156.60-156.65 region en route to the 157.00 neighborhood, or a two-week high touched on Tuesday. Some follow-through buying should pave the way for additional gains. The USD/JPY pair might then surpass the 157.45 intermediate hurdle and aim towards challenging a multi-month peak, around the 158.00 neighborhood, touched in November.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- US Dollar Index declines to around 98.55 in Thursday’s Asian session.
- Fed decided to lower the benchmark lending rate by a quarter point for the third consecutive time.
- Traders await the release of the US weekly Initial Jobless Claims data on Thursday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades on a negative note near 98.55 during the Asian trading hours on Thursday. The DXY extends the decline after the US Federal Reserve (Fed) delivered a rate cut at its December policy meeting.
As widely expected, the Fed cut its benchmark interest rate by 25 basis points (bps) to a target range of 3.50% to 3.75% at its December policy meeting on Wednesday, the third consecutive reduction since September. Fed Chair Jerome Powell emphasized that the US central bank is now "well positioned to wait and see how the economy evolves" and noted that a future rate hike is not a base-case scenario.
In their latest economic projections, Fed officials penciled in just one rate reduction next year, unchanged from their estimate in September. However, their latest policy statement suggests they’re leaning toward staying on hold in the near term. The DXY weakens as the Fed delivered an outlook that was less hawkish than expected.
Markets are currently pricing in nearly a 78% odds that the Fed will hold interest rates steady next month, compared with a 70% chance just before the rate cut announcement, according to the CME FedWatch tool.
The US weekly Initial Jobless Claims report will be in the spotlight later on Thursday. Analysts expect the number of Americans filing new applications for unemployment benefits to rise to 220,000, compared to 191,000 in the previous reading. However, if the report shows a stronger-than-expected outcome, this could help limit the USD’s losses in the near term.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Japanese Chief Cabinet Secretary Minoru Kihara said on Thursday that the government will closely monitor the impact on the Japanese economy of United States (US) financial conditions following Federal Reserve (Fed) rate cut.
Key quotes
Closely watching the potential impact on the Japanese economy of United States financial conditions following Federal Reserve rate cut.
Market reaction
The USD/JPY pair is losing 0.24% on the day to trade at 155.55 at the press time.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- USD/CAD remains on the defensive amid the divergent BoC-Fed policy outlooks.
- The overnight recovery in Oil prices underpins the Loonie and weighs on the pair.
- A positive risk tone dents the USD’s safe-haven demand and favors bearish traders.
The USD/CAD pair enters a bearish consolidation phase during the Asian session on Thursday and oscillates in a narrow band, just below the 1.3800 mark, or its lowest level since October 22. The fundamental backdrop, meanwhile, seems tilted firmly in favor of bearish traders and suggests that the path of least resistance for spot prices is to the downside.
The Canadian Dollar (CAD) continues with its relative outperformance against a broadly weaker US Dollar (USD) in the wake of the Bank of Canada's (BoC) hawkish tilt, signaling that the rate-cutting cycle was over. This marks a significant divergence in comparison to rising bets for more rate cuts by the US Federal Reserve (Fed) and validates the near-term negative outlook for the USD/CAD pair.
In a widely expected move, the BoC held its key interest rate at 2.25% on Wednesday on the back of encouraging third-quarter data, which showed that the Canadian economy has withstood some trade war-induced turmoil. Moreover, BoC Governor Tiff Macklem said during the post-meeting presser that the current rate is at about the right level to give the economy a boost through a structural transition.
This comes on top of increasing chatter that a rate hike was likely in the months ahead and helps offset US President Donald Trump's threat that he could impose fresh tariffs on agricultural products, including Canadian fertilizer and Indian rice. Apart from this, the overnight goodish recovery in Crude Oil prices underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair.
Meanwhile, the US central bank lowered borrowing costs by 25 basis points and projected one more rate cut in 2026. Traders, however, remained hopeful about two more rate reductions ahead in the wake of Fed Chair Jerome Powell's remarks, saying that the US labor market has significant downside risks. Powell added that the Fed does not want its policy to push down on job creation.
This, along with a generally positive tone around the equity markets, dents the Greenback's safe-haven demand and backs the case for a further near-term depreciating move for the USD/CAD pair. Traders now look to the release of Trade Balance data from the US and Canada, which, along with the USD and Oil price dynamics, should provide some impetus later during the North American session.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- WTI price declines to $58.70 in Thursday’s Asian session.
- Traders will closely monitor the developments surrounding the Ukraine peace deal.
- The Federal Reserve lowered interest rates again at its December meeting on Wednesday.
- US crude inventories fell by 1.812 million barrels last week, said the EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.70 during the Asian trading hours on Thursday. The WTI price drifts lower on diplomatic steps toward ending the Russia-Ukraine war. Traders will take more cues from the US weekly Initial Jobless Claims report later on Thursday.
US President Donald Trump told Ukrainian President Volodymyr Zelensky that he has until Christmas to accept his deal to end the war with Russia, per the Telegraph. Meanwhile, Zelensky said he is finalizing a revised peace proposal that he will deliver to the US soon, hinting at potential progress as Trump increases pressure on Kyiv to agree to a peace deal with Moscow.
Analysts believe that ending the Russia-Ukraine war would reduce threats to the region’s energy infrastructure and increase predictability on the supply side. This, in turn, could exert some selling pressure on the WTI price in the near term.
The Federal Reserve (Fed) announced its third consecutive interest rate cut this year, lowering the federal funds rate by 25 basis points (bps) to a range of 3.5%–3.75% on Wednesday. Lower rates can reduce consumer borrowing costs and boost economic growth and oil demand, supporting the black gold.
Data released by the Energy Information Administration (EIA) on Wednesday showed that crude oil stockpiles in the US for the week ending December 5 fell by 1.812 million barrels compared to an increase of 574,000 barrels in the previous week. The market consensus was for a decline of 1.2 million barrels in the reported period. A larger-than-expected draw in US crude oil stockpiles could lift the WTI price.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 7.0686 compared to the previous day's fix of 7.0753.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- AUD/USD drifts lower on Thursday and sticks to a negative bias after mixed Aussie jobs data.
- An unexpected fall in the Australian Employment Change offsets a steady Unemployment Rate.
- The divergent RBA-Fed policy outlooks warrant some caution for aggressive bearish traders.
The AUD/USD pair drifts lower during the Asian session on Thursday and erodes a part of the previous day's strong gains to its highest level since September 17. Spot prices stick to modest losses following the release of mixed Australian employment details and currently trade just above mid-0.6600s, though the downside potential seems limited.
The Australian Bureau of Statistics (ABS) reported that the Unemployment Rate held steady at 4.3% in November compared to the consensus estimate for an uptick to 4.4%. This, however, was offset by a fall in the number of employed people, by 21.3K during the reported month, down from 41.1K in October (revised from 42.2K) and missing the forecast of 20K. This, in turn, undermines the Australian Dollar (AUD) and turns out to be a key factor exerting some pressure on the AUD/USD pair.
That said, the Reserve Bank of Australia's (RBA) hawkish stance might hold back the AUD bears from placing aggressive bets and help limit losses for the currency pair. In fact, RBA Governor Michele Bullock, following the widely expected on-hold rate decision earlier this week, said that the Board discussed what they might have to do if rates need to go up and that it looks like more rate cuts are not needed. This could support the AUD/USD pair amid a bearish US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near its lowest level since October 21 in the wake of the US Federal Reserve's (Fed) dovish cut on Wednesday. In a widely expected move, the US central bank lowered borrowing costs by 25 basis points and projected just one more cut in 2026. Traders, however, remained hopeful about further cuts ahead in the wake of Fed Chair Jerome Powell's remarks at the post-meeting press conference.
Powell said that the US labor market has significant downside risks and the Fed does not want its policy to push down on job creation. Investors were quick to react and are now pricing in two more rate cuts in 2026. This, along with the upbeat market mood, continues to undermine the safe-haven Greenback and should contribute to limiting losses for the perceived riskier Aussie. Hence, any further corrective slide might still be seen as a buying opportunity and remain limited.
Economic Indicator
Employment Change s.a.
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.
Read more.Last release: Thu Dec 11, 2025 00:30
Frequency: Monthly
Actual: -21.3K
Consensus: 20K
Previous: 42.2K
Source: Australian Bureau of Statistics
Australia’s Unemployment Rate steadied at 4.3% in November, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday. The figure came in below the market consensus of 4.4%.
Furthermore, the Australian Employment Change arrived at -21.3K in November from 41.1K in October (revised from 42.2K), compared with the consensus forecast of 20K.
The participation rate in Australia decreased to 66.7% in November, compared to 66.9% in October (revised from 67%). Meanwhile, Full-Time Employment decreased by 56.5K in the same period from a rise of 53.6K in the previous reading (revised from 55.3K). The Part-Time Employment increased by 35.2K in November versus a decline of 12.5K prior. (revised from -13.1K)
Sean Crick, ABS head of labour statistics, said with the key highlights noted below
Both the number of unemployed and employed people fell in November, by 2,000 and by 21,000 respectively.
Full-time employment fell by 57,000 people, with males falling by 40,000 and females by 16,000 people.
The employment-to-population ratio fell by 0.2 percentage points to 63.8 per cent this month.
Market reaction to the Australia’s employment data
The Australian Dollar (AUD) attracts some sellers following the employment data. At the time of writing, the AUD/USD pair is trading 0.26% lower on the day to trade at 0.6662.
Australian Dollar Price Last 7 Days
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 7 days. Australian Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.29% | -0.28% | 0.28% | -1.14% | -0.98% | -0.73% | -0.05% | |
| EUR | 0.29% | 0.00% | 0.55% | -0.87% | -0.69% | -0.44% | 0.24% | |
| GBP | 0.28% | -0.01% | 0.58% | -0.86% | -0.70% | -0.45% | 0.23% | |
| JPY | -0.28% | -0.55% | -0.58% | -1.42% | -1.26% | -1.04% | -0.33% | |
| CAD | 1.14% | 0.87% | 0.86% | 1.42% | 0.17% | 0.42% | 1.09% | |
| AUD | 0.98% | 0.69% | 0.70% | 1.26% | -0.17% | 0.25% | 0.94% | |
| NZD | 0.73% | 0.44% | 0.45% | 1.04% | -0.42% | -0.25% | 0.68% | |
| CHF | 0.05% | -0.24% | -0.23% | 0.33% | -1.09% | -0.94% | -0.68% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
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