AUD/NZD hits two-week top, above mid-1.1000s on stellar Aussie jobs data

AUD/NZD attracts buyers for the fourth straight day and climbs to a two-week high.
The upbeat Aussie jobs data tempers bets for an early RBA rate cut and lifts the AUD.
Expectations for a more aggressive RBNZ easing contribute to the strong move up.

Haresh Menghani FXStreet

The AUD/NZD cross builds on this week's goodish rebound from the 1.0930 area, or its lowest level since early October and gains positive traction for the fourth successive day on Thursday. The buying interest picks up pace following the release of the upbeat Australian employment details and lifts spot prices to over a two-week high, around the 1.1060 area in the last hour.

The official data released by the Australian Bureau of Statistics (ABS) showed that the Unemployment Rate dropped to 3.9% in November, beating estimates for an uptick to 4.2% from 4.1% in the previous month. Additional details revealed that the number of employed people rose more than expected, by 35.6K during the reported month on the back of a solid jump in full-time jobs. The report forces investors to temper their expectations for a February rate cut by the Reserve Bank of Australia (RBA) and boosts the Australian Dollar (AUD).

The New Zealand Dollar (NZD), on the other hand, continues with its relative underperformance on the back of bets for a more aggressive policy easing by the Reserve Bank of New Zealand (RBNZ). This provides an additional lift to the AUD/NZD cross and further contributes to the ongoing recovery move from a technically significant 200-day Simple Moving Average (SMA) support. Meanwhile, the fundamental backdrop and the recent price action suggest that the path of least resistance for spot prices remains to the upside.

Economic Indicator

Unemployment Rate s.a.

The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.

Why it matters to traders?

The Australian Bureau of Statistics (ABS) publishes an overview of trends in the Australian labour market, with unemployment rate a closely watched indicator. It is released about 15 days after the month end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. Upbeat figure tends to be AUD positive.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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