Australia’s stellar jobs report for March has given the Australian dollar a new lease on life. AUDUSD was propelled around 1.0% higher in the immediate after the release of the figures earlier today, with the pair annihilating a resistance zone around 0.7750.
Australia’s unemployment rate dropped to 6.1% in March from a revised 6.2% in February, as the economy added 37.7K jobs last month, more than doubling market expectations, and employment growth in February was revised much higher (42K vs. 15.6K).
The deeper we look into the jobs report, the better it gets
Not only did the economy add a substantial amount of jobs over the last two months, they largely considered of full-time employment which is more indicative of a healthy economy than persistent growth in part-time employment. 73.4K full-time jobs were added in February and March alone, with 31.5K being added in March and February’s figure was revised to 41.9K from 10.3K previously. Also, the labour force participation rate jumped to 64.8% in March from a revised 64.7% in February (the un-revised figure was 64.6%).
In light of all this positive employment data, it’s no wonder the Australia dollar had such a positive reaction to the report. The data is strong enough to cast doubt over the previously almost rock-solid assumption that the RBA would cut interest rates in May. Prior to today’s figures the market was pricing in around a 75% chance of a rate cut next month, but this has dropped to around 56% at the time of writing. Also, we doubt every economist surveyed by Bloomberg still thinks the RBA is going to lower the OCR by 25 basis points next month, as they did at the end of last week.
AUDUSD
On the back of today’s employment-fuelled surge in AUDUSD, the next big test for the pair may come from a resistance zone around 0.7800. It’s not just that March’s employment report was inspiring, February revised report was even more encouraging. The market can sometimes brush aside one good data release as an outlier, but it cannot ignore two consecutive months of very strong data, even in if the accuracy of the report is under question. Combined with the recent unwinding of US dollar longs, today’s data should help to keep AUDUSD on the front foot in the near-term.
Source: FOREX.com
Recommended Content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.