The Australian dollar traded somewhat higher during the US session on Thursday as investors focused on both the AU and US data, while the situation in Ukraine also remained in attention.
Australian jobs market fails to spur volatility
Earlier today, Australian labor market data for January came out above market expectations as the employment change ended at 12,900, down from 64,800 previously, but better than 0 expected.
The Australian economy lost 17,000 full-time jobs in January but gained 30,000 part-time jobs in that month, hence the 12,900 total gain. However, trading part-time jobs for full-time jobs is not a good sign. The unemployment rate stayed at 4.2% and the participation rate slightly improved to 66.2%.
US-Russia conflict continues
Regarding the geopolitical conflict in Ukraine, some grim news was reported today as Russia has expelled US deputy chief of diplomatic mission, Bart Gorman, from the country, the US Embassy has said.
On the other hand, at the start of this year, the United States expelled dozens of Russian diplomats from Washington. While the move was technical, according to the State Department, citing visa expiration and non-renewals, Moscow said the move was part of the ongoing political tit-for-tat.
Meanwhile, according to the news agency Interfax, Russia has reemphasized on Thursday that there is no invasion of Ukraine and that it’s not planning any offensive.
On the US economic front, initial jobless claims worsened notably to 248,000, up from 225,000, putting the 4-week average to 243,000, At the same time, continuing claims improved from 1.619 million to 1.593 million.
Additionally, building permits printed a 0.7% monthly change, rising from 1.885 million to 1.899 million. Housing starts fell 4.1% monthly, down to 1.638 million from 1.708 million previously.
Immediate momentum seems unclear
Technically speaking, economists at Westpac see weakness developing towards 0.70 through the end of the month. But they think that the Australian dollar will find significant support at this level.
“The RBA is very likely to hold steady in coming months as many other G10 central banks hike rates, a drag on the AUD. Commodity price support is much more robust, so dips may be limited to the 0.70 handle rather than below.” they said on Thursday.
The next target for bulls could be at 0.7250, where last week’s highs are.