Aussie wage price index miss weighs on AUD/USD
AUD/USD is heavy following the miss in Australia’s main wages measure that has been a focus for markets today with respect to the Reserve Bank of Australia’s monetary policy.
Analysts at Westpac explained that wages are now back to a pre-Covid pace where wages were underperforming economic activity. ”If there was ever a time for wages to regain some of the relationships with broader labour market indicators, 2022 must be the year.”
”Even more important than the fall in unemployment to 4% has been the more than halving of underemployment, from a peak of 13.6% in Apr 2020 to 6.3% in Mar 2022. ”
The data has arrived as follows:
- Australia Q1 wage price index +0.7 pct QoQ, s/adj (Reuters poll +0.8 pct).
- Australia Q1 wage price index +2.4 pct YoY, s/adj (Reuters poll +2.5 pct).
AUD/USd is a few pips lower.
About the Wage Price Index
The Wage Price Index released by the Australian Bureau of Statistics is an indicator of labor cost inflation and of the tightness of labor markets. The Reserve Bank of Australia pays close attention to it when setting interest rates. A high reading is positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).