AUD/USD falls further to approximately 0.6900 in response to disappointing Australian Employment statistics

The AUD/USD pair has extended its decline to near 0.6900 after the Australian Bureau of Statistics released Employment (Dec) data that was poorer than anticipated. The Australian labor market has seen the layoff of 14,600 workers, whereas the market was anticipating an increase of 22,500 positions. In addition, the Unemployment Rate has increased to 3.5%, surpassing both the forecast and the previous release of 3.4%.

The rising unemployment rate is undoubtedly detrimental to the Australian economy, but it will bring some respite to the Reserve Bank of Australia (RBA). Governor Philip Lowe of the Reserve Bank of Australia (RBA) has raised the Official Cash Rate (OCR) to 3.10 percent in an effort to combat persistent inflation, and it appears to have begun hurting the labor market.

Wednesday's Australian Property Investor (API) news article stated, "Despite the pain felt by homeowners trying to meet mortgage repayments, recent buyers staring into the abyss of negative equity, and property prices falling at the fastest pace on record, it seems unlikely that rate hikes will abate soon. The steady increase in household spending, which grew by 11.4% in November, is responsible for the increase in interest rates, they added.

The Australian Dollar has been harmed by worse employment data and a decline in perceived risk appetite. After a dismal Wednesday, investors' risk appetite has diminished further as S&P500 futures have resumed their decline. The US Treasury yields are supported by the concept of risk aversion gaining traction. The yield on 10-year US Treasury bonds has risen back above 3.38 percent.