AUD/USD: Upside capped at 0.67, Investors await Aussie jobs report
- AUD/USD's upside has stalled around the zero figure of 0.67.
- Aussie jobs report due Thursday is expected to show an uptick in the jobless rate.
- A big beat on expectations is needed to strenthen the bid tone around the Aussie dollar.
The AUD/USD pair is mildly bid, but struggling to cut through the psychological resistance of 0.67 with investors likely waiting on the sidelines ahead of the all important Aussie jobs report, scheduled for release on Thursday.
The data is expected to show the jobless rate ticked higher to 5.2% in January from December’s 5.1% reading and the economy added 10K jobs versus 28.9K previously.
It's worth noting that the coronavirus outbreak became a cause for concern at the end of January. The January jobs data, therefore, would largely represent the pre-virus period and could be dismissed by markets as being an outdated one.
So, it would take a big beat on expectations to lift the AUD, However, if the data prints below estimates, markets may begin pricing higher odds of an RBA rate cut in the first half of 2020, sending the AUD lower.
Currently, the overnight index swap (OIS) market is pricing a March rate cut at 8% and 25 basis point cut is not fully priced in until October, according to Reuters News.
At press time, AUD/USD is changing hands at 0.6695, having hit a high and low of 0.6701 and 0.6683 earlier today.
The pair may challenge session lows if the S&P 500 futures turn red on coronavirus fears. At press time, the index futures are reporting a 0.30% gain.