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AUD/USD: No response to Aussie Q4 wage growth data

  • Aussie wage growth for the fourth quarter matched estimates. 
  • The data for the pre-virus period failed to move the needle on the Australian currency. 
  • The Aussie labor market report, due this Thursday, could yield big moves in the Aussie pairs.

AUD/USD has barely moved in response to the Aussie wage growth data for the fourth quarter released by the Australian Bureau of Statistics 00:00 UTC. 

The data showed wages growth sticking at 0.5% quarter-on-quarter and 2.2% year-on-year as expected, leaving the AUD/USD unaffected around 0.6692, the level where it was trading before the data was released. 

The lackluster market reaction is not surprising, given the fourth quarter wage growth largely reflects the pre-coronavirus period and look outdated. 

The focus now is on the labor market data scheduled for release on Friday. the economy is forecasted to have added 10k jobs in January and the jobless rate is expected to have risen slightly to 5.2% from 5.1% previously.

The Aussie could face selling pressure while heading into Thursday's labor market report, courtesy of virus-led risk-off tone in the equity markets and the dovish RBA minutes released Tuesday. 

The US stocks dropped on Tuesday with the Dow Jones Industrial Average losing over 0.5%. Meanwhile, the minutes flagged concerns about the COVID-19 coronavirus outbreak and noted there was a case for further cuts as lower rates could “speed progress towards the bank's inflation and employment goals. 

It's worth noting that the markets are currently pricing a quarter-point rate cut by October.

Technical levels

 

Australia Wage Price Index (YoY) in line with expectations (2.2%) in 4Q

Australia Wage Price Index (YoY) in line with expectations (2.2%) in 4Q
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