• AUD/USD has stretched its south-side journey to near 0.6900 as the Australian labor market shrinks.
• The Australian economy reported a lay-off in December. The Unemployment Rate rose to 3.5%.
• Investors’ risk appetite has trimmed further as the S&P500 futures continued their downside journey.

The AUD/USD pair has extended its downside journey to near 0.6900 as the Australian Bureau of Statistics has reported weaker-than-projected Employment (Dec) data. The Australian labor market has witnessed a lay-off of 14.6K employees while the street was expecting an addition of fresh 22.5k jobs. Also, the Unemployment Rate has climbed to 3.5% vs. the expectation and the prior release of 3.4%.

No doubt, the rising jobless rate is negative for the Australian economy, however, it will provide a sense of relief to the Reserve Bank of Australia (RBA). RBA Governor Philip Lowe has hiked the Official Cash Rate (OCR) to 3.10% in its fight against stubborn inflation and it seems that it has started impacting the labor market

Australian Property Investor (API) news report claimed on Wednesday that “Regardless of the pain felt by homeowners trying to meet mortgage repayments, recent buyers staring into the abyss of negative equity, or property prices falling at the fastest pace in memory, any hope that rate rises might abate soon appears slim. They further added that the continuous rise in household spending, as increased by 11.4% in November, is responsible for bulking interest rates.

The Australian Dollar has been punished by weaker Employment data and lower demand for risk-perceived assets. Investors’ risk appetite has trimmed further as the S&P500 futures have resumed their downside journey after a bearish Wednesday. Growing traction for the risk aversion theme is supporting the US Treasury yields. The return generated by the 10-year US Treasury bonds has rebounded above 3.38%.