Aussie Dollar Shows Little Excitement Despite Upbeat Jobs Report
- Australian Dollar was little changed against the US Dollar following Janaury’s jobs report
- Not only did Australia add more jobs than expected, but the unemployment rate ticked down
- RBA rate hike bets were likely uninspired as front-end government bond yields wobbled
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The Australian Dollar showed a tepid response against its US counterpart after better than expected employment figures crossed the wires. During January, Australia added 13.5k positions versus the 10.0k expected gain. In addition, last month’s reading was revised higher from 13.5k to 16.3k.
Looking at the details, the country actually lost 44.8k full time positions. However, the part time sector managed to hire more participants with 58.3k jobs added.
As for the unemployment rate, it ticked down from 5.8 percent to 5.7 percent, beating expectations for an unchanged result. The participation rate did however fall from 64.7% as expected, to 64.6%. This implies that the increase in hiring was accompanied by fewer competition.
The markets likely didn’t see today’s data as markedly altering the near-term RBA policy outlook. Australian 2-year government bond yields wobbled in tandem with the data’s release. Overnight index swaps are pricing in just a 40 percent chance of an RBA rate hike over the next 12 months. Last week, the central bank left its overnight main lending rate unchanged and maintained the view that current policy will deliver sustainable growth and a return to the inflation target overtime.
Chart compiled in Tradingview
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