Both the Australian dollar and pound sterling are benefitting from the arrival of positive jobs data this week. The pound kicked the week off as one of the weeks top performers after their UK data saw a record high employment rate and a steady wage growth rate. Now it appears to be the AUD’s turn to take advantage of desirable jobs data figures. The GBP/AUD is still trading at high levels despite a slight drop from Wednesday’s monthly highs, but this optimism may give the AUD the lift it needs to close the gap.
Australian Jobs Data Works in Favour of the AUD, Fuelling the Comeback for the Currency
Yesterday saw the release of the Australian jobs data which impressed and shocked the market. After a recent poor run on a domestic and global scale, the Australian Dollar (AUD) experienced a much-needed rebound. The positive data appears to have been enough for speculations to fizzle-out about the Reserve Bank of Australia (RBA) making any interest rate cuts next month, but concerns still linger about the global market risk-aversion which is limiting the AUD’s support.
Despite the positive announcement on the Australian front, it hasn’t been enough to edge over the GBP, which is still celebrating its own labour market success. Later today will see the release of the UK’s PMIs which could make or break the run the GBP is currently on. The GBP was overshadowed with Bank of England rate cut bets in recent weeks, but it seems like the recent success has fended off the chances of a cut for now. This is provided that the Friday data is positive and doesn’t eradicate the hopes of a GBP surge.
AUD Exchange Rates Lift as RBA Rate Cut Bets Begin to Fade
Like the GBP, the Australian dollar has had its own issues to deal with regarding its central bank and the fear of a rate cut in the coming months. Recent poor performances and the natural disasters in the form of the bushfires combined to drag down the Aussie economy. This increased rate cut bets from the RBA for February. But now the positive jobs data could help turn the situation around. Key figures that shocked the market were Australia’s unemployment rate, which unexpectedly improved from 5.2% to 5.1%. The employment change report was also stronger than forecast at 28.9k. Therefore, this data helped to raise Australia’s domestic outlook and slash down the bets of a rate cut from the RBA in February.
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