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Markets continued to take advantage of the positive sentiment that emerged after the FOMC meeting on Wednesday. This is not surprising since the start of the new year, they have been relying on expectations of a pause in interest rate hikes by the Fed and a complete end to the hike cycle this year.
Although there is still a large number of skeptics who believe that there will be a recession, which will lead to a fall in risk appetite and a rise in dollar, the Fed itself is not interested in crippling the national economy, so it is likely that the bank will seek a soft landing to avoid a sharp downturn. And if the data on job growth shows a decrease, the bank may consider not raising the rates after taking a pause in hiking them. In that case, the local stock market will continue to rise.
The chances of the scenario mentioned above happening is quite high as the employment data due out today is expected to indicate a fall to 190,000 in December. The global unemployment rate will also be 3.6%, which is slightly higher than the previous month's 3.5%. This will strengthen risk appetite, which will lead to further pressure on dollar and Treasury yields.
Forecasts for today:
AUD/USD
The pair settled at the support level of 0.7065, waiting for key data from the US. If the report shows that the number of new jobs declined, the price will climb to 0.7200.
USD/JPY
The pair is currently trading above the support level of 128.10. Negative news from the US labor market will push the quote down to 127.00 and possibly, below 126.10.
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