Halister News

(Bloomberg) -- A test of AUD/USD 0.7577 100-DMA is possible if an Australian November jobs beat ties together a tame Fed statement and strength in commodities, writes Bloomberg strategist Michael G. Wilson.

• Aussie TWI, while elevated at 65.40, is still below 1-yr high of 65.50 seen Oct. 26, when the currency was above 0.76 and the 100-DMA
• Since then, rising terms of trade and national income from improved commodity prices have insulated AUD from USD strength
• A major hurdle to RBA’s inflation target has been the domestic drag from weak jobs and wages growth
  • Were jobs to show signs of improvement, and Janet Yellen also unveil a Fed dot plot path that misses expectations for 2 increases in 2017, AUD/USD should find itself north of the 0.7577 100-DMA; spot currently steady at 0.7500
  • Yellen spent a good part of her October speech in Boston talking about running “a high pressure economy,” making the point that it could boost productivity growth and improve the U.S. labor market
• Australian employers probably added net 17.5k jobs in November versus 9.8k in October, according to Bloomberg survey; ests. range from +5k to +35k; data due Thursday at 11:30am local
  • Unemployment rate seen unchanged at 5.6%
• A caveat to this view would be a poor balance between full- time and part-time jobs, or deteriorating underemployment

• NOTE: Michael G. Wilson is an FX strategist who writes for First Word. The observations he makes are his own.