AUD/USD bulls on standby for Aussie Employment data

• AUD/USD is holding firm in bullish territory, awaiting today's Employment data.
• The Fed was a disappointment for the US dollar bulls.

AUD/USD is starting out the day in Asian markets on the front foot due to in part comments from a senior Chinese official that boosted hopes for more stimulus, as well as following a mixed Federal Reserve outcome on Wednesday. The Aussie is sat at 0.7288 as traders await today's Employment data for Australia. 

On Wednesday, Xinhua news agency cited Vice Premier Liu He said China will roll out policy steps favourable for its capital markets. This was already offering to support the Aussie until the US dollar rallied in the New York trade after the US Federal Reserve moved to a hawkish monetary policy. However, the bid was shortlived when the Fed was not delivering a firmer rhetoric in the presser.

The fEd hiked by 25 basis points and the statement showed that most Fed officials see as many as seven rate increases in 2022. The Fed explained that the economic activity and employment indicators have continued to gain strength, jobs gains have been sold in recent months, and the unemployment rate has fallen notably.

"The committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run," the FOMC said. "With appropriate firming in the stance of monetary policy, the committee expects inflation to return to its 2 percent objective and the labor market to remain strong," it added.

Separately, the Fed's dot is also pointing to a consensus funds rate of 1.9% by the end of this year. It sees three more increases in 2023 and then none the following year, pencilling in rate hikes at every remaining meeting this year. 

However, the hawkishness was erased in comments during the Fed chairman's presser. Jerome Powell said rate rises will depend on inflation and economic data. He has stated that the Fed is looking for the month on month inflation to come down.

For the day ahead, the  Australian labour market data for February are released at 11:30am. ''We expect to see the unemployment rate drop to 3.9% (4.2% previously), led by a 50k lift in employment.

We’ve already seen a surge in Australian job ads in the wake of the disruption caused by the Omicron outbreak – and it’s looking like the labour market should be able to shake off its impacts pretty quickly,'' analysts at ANZ Bank said.