AUD/USD close to one-month highs on job outlook in Australia

Australian dollar traded in proximity to highs unseen in one month against its US counterpart on Monday on prospects that jobs in Australia rose a second month in December before the official report, scheduled for release on January 16th, while US non-farm payrolls came short of expectations last Friday.

AUD/USD climbed to a session high at 0.9042 at 4:45 GMT, also the pairs highest point since December 12th, after which consolidation followed at 0.9032, gaining 0.40% for the day. Support was likely to be received at January 10th low, 0.8876, while resistance was to be met at December 12th high, 0.9082.

Australian dollar received support against peers today after a report stated that home loans in the country rose by seasonally adjusted 1.1% in November, while preliminary estimates pointed to a 1.0% increase. Housing market in the country demonstrated a strong performance in the past year, with prices rising at the fastest pace in three years.

Australian investment lending climbed 1.5% in November compared to October, after a 6.8% increase in the preceding month.

“The data coming out of Australia has been stable to good and that needs to continue with the unemployment number later this week for people to reassess their rates outlook,” said Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company in Sydney, cited by Bloomberg News. “If the Aussie can consolidate above 89.50, there’s potential for a move higher.”

Jobs in Australia probably increased by 10 000 in December following the 21 000 gain, according to the median estimate of economists. The official report is due to be released on January 16th.

However, the number of job advertisements in Australia continued to drop in December, as the rate of decline has slowed down considerably in the past six months. Job advertisements fell 0.7% in December compared to November and 9% in December 2013 compared to December 2012. In November compared to October job advertisements in Australia fell 0.9%, according to data by the Australia and New Zealand Banking Group (ANZ).

The yield on Australian 10-year government bonds dropped four basis points, or 0.04 percentage point, to reach 4.23% today, after climbing to 4.27% on Friday.

Meanwhile, on Friday it became clear that US private sector added only 74 000 new job positions in December, which marked the slowest rate of increase in nation’s employment since the beginning of 2011. This result suggested that US labor market might have lost some of its momentum and may also demonstrate a weaker performance than other economic indicators implied at the start of the new year. Hiring appeared to be weak in almost all sectors. Experts had expected that US economy will add 195 000 jobs in December, while the number of non-farm payrolls was 203 000 in November.

On the other hand, the rate of unemployment in the country dropped significantly, reaching 6.7% in December from 7.0% in the preceding month, which marked the lowest rate since October 2008. However, this came as a result of a larger percentage of US citizens leaving nation’s work force. Preliminary estimates pointed that US unemployment rate will remain unchanged in December.

Average hourly earnings in the country increased 0.1% last month, after another 0.2% climb in November compared to October.

Elsewhere, the Aussie was advancing against the euro, with EUR/AUD cross falling 0.50% on a daily basis to trade at 1.5118 at 7:28 GMT. AUD/NZD pair was gaining 0.17% today to trade at 1.0862 at 7:29 GMT.