AUD/USD little changed, poised for a weekly drop

Australian dollar traded little changed and was set for a weekly drop against its US counterpart on Friday ahead of the release of US non-farm payrolls report, which may urge the Federal Reserve Bank to continue tapering its monetary stimulus.

AUD/USD reached a daily low at 0.8876 at 1:05 GMT, after which consolidation followed at 0.8898, dipping a mere 0.01% for the day. Support was likely to be found at January 9th low, 0.8866, while resistance was to be encountered at January 8th high, 0.8952. The weekly drop of the pair was 0.5%. Australian dollar has depreciated 16% during the past 12 months against the greenback.

Employers in the United States probably added 197 000 new jobs in December, according to the median estimate of economists participated in a survey by Bloomberg News, after job positions were boosted by 203 000 in November. The official figures are expected later in the day.

A report by the ADP research institute revealed on Wednesday that the US private sector added 238 000 workers in December, the most since January 2012, exceeding analysts’ projections of 200 000 new jobs, while in November employers added 215 000 positions. The ADP report is calculated according to the same methods the Bureau of Labor Statistics (BLS) uses and is published every month, two days before the official BLS non-farm payrolls report.

“The market is thinking we’re going to get a relatively strong payrolls number again,” said Jim Vrondas, the chief currency and payment strategist at OzForex Ltd. in Sydney, cited by the same media. “Definitely the U.S. dollar is seen as one currency that can strengthen over the course of this year. The market is still looking at selling the Aussie dollar on a rally.”

Meanwhile, in Australia, the Housing Industry Association (HIA) reported that new home sales rose 7.5% in November compared to October, or the fastest pace in the past four years, following a 3.8% decrease in the preceding month. This came as another signal that record low borrowing costs are supporting other sectors of economy, after boom in mining has faded.

The yield on Australian benchmark 10-year government bonds fell five basis points, or 0.05 percentage point, from yesterday to reach 4.27%. The yield has decreased eight basis points since January 3rd.

Traders saw a 19% probability that the Reserve Bank of Australia (RBA) will introduce a reduction of its benchmark interest rate by its policy meeting in June, according to swaps data. Yesterday the odds of such a move were 23%.

Elsewhere, the Aussie was steady against the euro, with EUR/AUD cross ticking down 0.01% to trade at 1.5294 at 7:42 GMT. AUD/NZD pair was advancing 0.19% on a daily basis to trade at 1.0806 at 7:43 GMT.