Pricing for February Reserve Bank of Australia rate cut jumps after the strong jobs report

The latest employment report just published in Australia:

• Australia December 2024 unemployment rate 4.0% (vs. 4.0% expected)

continued to show a resilient and tight labour market.

Interest rate trading is now pricing around a 75% chance of a rate cut at the Reserve Bank of Australia meeting on February 18. All eyes will be on the Q4 inflation data due for release on January 29.

You may be asking why the RBA would cut with such a tight jobs market. I know I am. The why is the Bank is under pressure to cut. Not least from the government ahead of a likely May election. Yes the RBA is independent … but not THAT independent.

AUD/USD popped to 0.6248.

This article was written by Eamonn Sheridan at www.forexlive.com.