Australian employment surprised to the upside printing at 14.5K versus 5.1K for the month of September which helped to spur a rally in AUDUSD in early session Asian trade. This was the second time in three months that employment data beat forecasts suggesting that the labor situation Down Under is healthier than the market thought despite the clear economic slowdown in the region.

Australia’s unemployment rate came in at a seasonally adjusted 5.4 percent in September compared to 5.1 percent in August. Economists had expected a more modest increase in the jobless rate to 5.3 percent but the rise was due to increase in the participation rate which rose to 65.2 percent, topping expectations for 65.0 percent.

In a further sign of strength of the report the number of full-time jobs advanced by 32,100 in September, and part-time employment fell by 17,700. It remains to be seen however, if today’s robust labor data will persuade the RBA to remain stationary for the time being.

The Aussie responded well to the news rising to a high of 1.0280 in Asian session and may continue to outperform as the day proceeds. Today’s data point was the first bright piece of news out of Australia over the past several weeks and may spur further short covering as traders reassess the chances of additional rate cuts in the region.

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