Thursday’s release of Australia’s January labour report can be expected to inject fresh life into the debate regarding the likelihood of a Reserve Bank of Australia (RBA) rate hike during the course of 2022. Strong data could lift the aussie to the 0.72 level, according to economists at Rabobank.

Scope for AUD/USD to inch higher towards 0.74 on a 12-month view

“The market median for the Australian January unemployment rate stands at 4.2%. Any strength in the labour market report over and above market expectations is likely to increase the pressure on the RBA to widen the scope for a rate hike this year. Strong data are likely to put AUD/USD 0.72 back in view assuming no surge in safe-haven demand for the USD near-term.” 

“Given the strength of commodity prices and a healthy economic outlook in Australia, we see scope for AUD/USD to edge moderately higher to the 0.74 region on a 12-month view.”