AUD/NZD bulls take back control on Aussie jobs, but . . . is the data as rosy as the price movement thinks it is?


  • AUD/NZD has rallied on the release of the Aussie jobs data with the unemployment rate moving more in lines with what the RBA would like to see down at 5% and below the 5.3% where it had been accumulating for quite some time. However, the participation rate was a miss and lower than the expected 65.7% and the prior 65.7%, arriving at 65.4%.
  • AUD/USD rallied to a high of 0.7130 on the news that the unemployment rate had fallen. 

RBA Deputy Governor Debelle's speech at the Citi Conference on The State of the Labour Market yesterday was a reminder to markets that there are concerns in the RBA over the nation's low wage growth - This is despite strong employment and decent participation rates. It was then when he hinted that the unemployment rate might have to fall below 5% (current: 5.3%) to stabilize inflation. 

However, today's rate only fell to 5% - So there could be a change of tides here when the markets digest this, especially if this is seen as just transitory.  

The Aussie is by no stretch of the imagination out of the woods yet, not with the amount of risks associated to higher US yields, trade wars, EM-FX, the Yuan as high as it is with little signs of a change in its southerly trajectory in immediate sight - currently at 6.9300 and lowest levels since 11th October.

Indeed, while the unemployment change is great news - there is still plenty in there that needs a second look, and not all is rosy as this price movement says it is. 

Aussie jobs outcomes:

  • Employment Change: +5.6K, came in at a miss vs the expected +15.0K, prior +44.0K … prior revised to +44.6K
  • Unemployment Rate: 5.0% vs expected 5.3%, vs prior 5.3%.
  • Full-Time Employment Change: +20.3K, prior was +33.7K, revised to +35.2K.
  • Part Time Employment Change: -14.7K, prior was +10.2K, revised to +9.5K.
  • Participation Rate: 65.4%, vs expected 65.7%, prior 65.7%.

Meanwhile, a better risk environment of late has been contributing to the Kiwi's rise that was otherwise already well supported on domestic factors with the GDP and CPI surprise beats. Firstly, in late Sep.,the New Zealand April to June economic growth came in at a beat: +1.0% q/q  expected 0.8% q/q, prior 0.5%  2.8% y/y expected 2.5% y/y, prior 2.6%, revised from 2.7%. Then, we had the recent NZ CPI data that will have diminished ideas of a rate cut shortly from the RBNZ. The data arrived at 0.9% q/q vs. expected 0.7% and much better than prior 0.4% q/q - (1.9 % y/y - higher than expected 1.7% y/y, prior 1.5%). However, it depends as to whether the RBNZ will interpret this strength in Kiwi data as just transitory or not. 

AUD/NZD levels

Before the pre-data and post data spike, the cross had broken through the 1.0851/32 support zone which brings the 200-week moving average at 1.0757 to the fore, according to analysts at Commerzbank:

"Around it we would expect the currency pair to at least short-term stabilise. Were this not to be the case, the February, May and June lows at 1.0657/52 would be back in the picture but should hold. Immediate downside pressure will be maintained while the currency pair remains below the 55 day moving average and the current October high at 1.0945/95 as well as the September high at 1.1022. Above the latter sits the 1.1058 August 21 high. It would have to be exceeded on a daily chart closing basis for the August high at 1.1180 to be back in the picture. This is not our favoured view and instead a continued slide should unfold."

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

USD/JPY trades below two-week top set on Thursday; looks to BoJ for fresh impetus

USD/JPY trades below two-week top set on Thursday; looks to BoJ for fresh impetus

USD/JPY trades with a positive bias below the 143.00 mark as traders await the BoJ policy update before placing fresh directional bets. In the meantime, data published this Friday showed that Japan's Core CPI rose to a 10-month high in August and reaffirmed bets that the BoJ will hike interest rates again in 2024. 

USD/JPY News
AUD/USD strengthens above 0.6800 on RBA-Fed policy divergence, eyes on PBoC rate decision

AUD/USD strengthens above 0.6800 on RBA-Fed policy divergence, eyes on PBoC rate decision

The AUD/USD pair trades on a stronger note near 0.6810 during the early Asian session on Friday. The uptick of the pair is bolstered by the softer US Dollar amid the prospects of further rate cuts by the US Federal Reserve this year. Later on Friday, the Fed’s Patrick Harker is set to speak.

AUD/USD News
Gold price holds steady near record peak amid bets for more Fed rate cuts

Gold price holds steady near record peak amid bets for more Fed rate cuts

Gold price hovers near the all-time peak touched earlier this week amid a bearish USD and rising bets for more upcoming rate cuts by the Fed. Moreover, concerns about an economic downturn in the US and China further underpin the safe-haven XAU/USD.

Gold News
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
XRP eyes gains as Ripple gears up for stablecoin launch, Grayscale XRP Trust notes rising NAV

XRP eyes gains as Ripple gears up for stablecoin launch, Grayscale XRP Trust notes rising NAV

Ripple (XRP) gained 2.3% since the start of the week. The altcoin’s gains are likely powered by key market movers that include Ripple USD (RUSD) stablecoin, Grayscale XRP Trust performance and the demand for the altcoin among institutional investors.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures