Strong Employment Increases Australian Dollar
Australian Dollar had blazed the way higher for “growth-sensitive” following the previous reports about Australian jobs. Employment increased at 30.9K in August, notably above the 25k that was expected. As well as the 25k in July. The best part of this is that most of the increase came from the full time jobs, those increased in 53.1K, while part time employment actually decreased by 22.1K.
The robust growth of employment in August but it was the fall in the unemployment rate that really caught the market’s eye previously. Australian markets moved to a prove roughly one in four chance the RBA raises rates at its next (October) meeting, propelling the AUD/ USD to a 4 month highs above 0.9250.
Here the Australian Dollar is currently getting a boost from the said expected employment data, but as seen therefore as a stronger reflection of economy due to its positive notion for interest rate expectations. The Australian markets are trying to maintain a fairly conservative view with the matters of interest rate hikes, out from the Reserve Bank of Australia. While the US data continued its recent improving tone as well, keeping markets relatively buoyant risk appetite intact. Overnight the index swaps suggest that the central bank will raise at least rates which is up by 25 basis points over the next twelve months, up from its 10 basis points before the employment data. With the reflection of the trading action, the Australian dollar broke above the 0.92 area, which was posing near term resistance, however the break is not decisive at the moment. The view on the coming days risk trends is pushing its move in Australian market.
