AUD Under Pressure Despite Stronger-Than-Expected Job Creation
The Australian Dollar (AUD) has regained some of its losses following stronger-than-expected job creation data in August. However, it remains under pressure due to a rise in the Unemployment Rate to 4.6%, exceeding expectations and the previous reading of 4.5%. The economy created 39.5K jobs in August, far surpassing the 20K increase forecast by markets.
The strong job creation data could bolster the case for a restrictive monetary policy stance from the Reserve Bank of Australia (RBA), as a resilient labor market may keep inflationary pressures elevated and limit the central bank's room to ease policy. The US Dollar (USD) continues to receive significant support from the bond market, with the 10-year US Treasury yield reaching its highest level in 19 years at 5.15%.
Bank of Cleveland Federal Reserve President Beth Hammack stated that US inflation remains elevated while demand and economic activity remain solid. She warns that the longer price pressures persist, the more difficult it could become to return inflation towards the central bank's target.