Australian Dollar Emerges Strongest After Employment Report

The Australian dollar rallied against all other of its most-traded rivals, even the Japanese yen, which itself was rather strong. The main reason for the Aussie’s great performance was a surprisingly good domestic employment report, which improved the outlook for monetary policy a bit. Even risk aversion prevailing on the market was unable to stop the Australian currency from rallying.
The Australian Bureau of Statistics reported that the number of employed people in Australia climbed by 28,900 in December after surging by 38,500 in November. The size of the increase was more than two times the forecast amount of 12,200. The increase was registered in both full-time and part-time employment. And on top of that, the unemployment rate unexpectedly fell from 5.2% to 5.1%.
Two consecutive months of extremely strong employment growth made investors scale back their bets on an interest rate cut from the Reserve Bank of Australia in February. Despite the positive data, though, unemployment is still far from the central bank’s target of 4.5%. Therefore, market participants still expect a cut, just at a bit later date.
Released separately, the expected inflation rate, reported in the Melbourne Institute Survey of Consumer Inflationary and Wage Expectations, increased from 4.0% in December to 4.7% in January.
AUD/USD climbed from 0.6844 to 0.6868 as of 11:11 GMT today. EUR/AUD slumped from 1.6204 to 1.6145. AUD/JPY was up from 75.17 to 75.24, though it has retreated from the daily high of 75.49.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Original from: www.earnforex.com