The AUD/USD pair held steady around 0.6145 during the early Asian session on Monday. The US jobs growth came in stronger than expected in December, supporting the US Dollar (USD) across the board.

The data released by the US Bureau of Labor Statistics (BLS) on Friday showed that Nonfarm Payrolls (NFP) rose by 256K in December, compared to an increase of 212K (revised from 227K) seen in November. This reading beat the market expectation of 160K by a wide margin.

Meanwhile, the Unemployment Rate fell to 4.1% in December from 4.2% in November. Lastly, annual wage inflation, as measured by the change in Average Hourly Earnings, eased to 3.9% in December from 4% in the previous reading. Upbeat US labor market data for December is likely to convince the US Federal Reserve (Fed) to keep interest rates unchanged this month, supporting the greenback against the Australian dollar (AUD). According to the CME FedWatch tool, financial markets expect the US central bank to keep its benchmark interest rate unchanged in a range of 4.25%-4.50% at its meeting on January 28-29. "It took a series of very poor jobs reports to get the Fed to ease again in March, and, so, now we see the next cut in June followed by the last one in September," said Michael Feroli, chief US economist at JPMorgan.

On the other hand, the Aussie remains under selling pressure against the USD, at its lowest level since April 2020. Slower growth and deflation risks in China continue to undermine the China-proxy AUD. Citi economists said that the final quarter of last year is expected to be the seventh consecutive year that China's GDP deflator has been negative. (AL)

Source: Fxstreet