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As the Australian economy emerges out of a recession, its labor market recovery is seen strengthening in December, the latest employment report, due to be published by the Australian Bureau of Statistics (ABS) this Thursday at 00:30 GMT.

Ahead of the event, risks remain skewed to the upside for the aussie, FXStreet’s Dhwani Mehta reports.

Key quotes

“The OZ economy is expected to have added 50K jobs in December after seeing a solid job gain of 90K in November. The Unemployment Rate is forecasted to drop to 6.7% last month, the lowest levels since April 2020. The jobless rate unexpectedly fell to 6.8% in November versus October’s figure of 7%. The Participation Rate is seen a tad higher at 66.2% in the final month of 2020 vs. November’s 66.1%.”

“A disappointment in the jobs report could prompt the RBA to do more, although negative rates remain a less likely option. The best call for the central bank would be to expand its bond-buying programme.”

“In any scenario, the aussie dollar is set to benefit amid prospects of additional stimulus likely to be rolled out globally, as major economies continue to battle the pandemic-induced recession.”