Aussie gains on positive labour data

Source: Dukascopy Bank SA
"Underlying labour market conditions have clearly improved in recent months"
-Justin Fabo, senior economist at Australia & New Zealand Banking Group Ltd.


Australia belongs to the list of countries with a triple A rating, and the currency has been resilient even despite concerns about slowing growth in the domestic economy, as well as largest trading partner– China. Therefore, it is not a surprise that investors are stepping up their purchases of the Australian Dollar, which can become a safe-haven currency soon. Furthermore, the currency is inching higher back to the "uncomfortably high" zone on the back of optimistic data, including this week's figures from the labour market. The Aussie found a double joy from Chinese imports as well as stronger-than-excepted domestic hiring. The AUD/USD pair soared 0.46% to 0.9368 following the release of both reports.

On Thursday, Australian Bureau of Statistics said the Oz economy added 14,200 new jobs in April, beating market's estimates for a 9,500 growth. Despite upbeat data, the level is almost twice less than recorded in March. The overall unemployment rate remained unchanged at 5.8%, also surprising markets to the upside. Another indicator, the participation rate, fell to 64.8% to 64.7%. Improving economic outlook and stronger sentiment are both forcing employers to create more jobs. Since late 2011 the RBA has reduced the key refinancing rate by 2.25% and it seems that these efforts have finally transferred to a job growth. Stronger hiring and improved housing market conditions indicate that companies are ready to step up on investment.
© Dukascopy Bank SA

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